Australians face record-high median rents, hitting $600 per week

Australian renters are now facing unprecedented expenses, as the median rent across the nation has recently surpassed the $600 weekly mark, setting a new all-time high. Eliza Owen, head of research at CoreLogic, highlighted that “The $601 median is a series high, and coincides with total annual rent increases of 8.3 per cent nationally.”

The rental landscape has seen dramatic changes since August 2020, when the weekly median rent was substantially lower at $437. In the span of approximately three years, there’s been an increase of $8,000 annually, resulting in the average renter now paying an annual cost of $31,252 for housing.

Considering these figures, an Australian household must now earn at least $94,000 after tax to ensure that rent remains within the ‘affordable’ category, which is defined as not exceeding 30% of household income.

Multiple factors have contributed to this upward trend in rents. Owen pointed out that “a notable decline in the average household size from late 2020,” which was partly attributed to “a reduction in share housing,” led to a higher demand for independent dwellings even as the nation’s population growth was nearly at a standstill in 2021.

The reopening of international borders towards the end of 2022 further escalated the demand for rental properties. Additional longer-term issues like the dwindling supply of social housing and a decreasing home ownership rate have also pressured the rental market.

As the cost of renting continues to outpace wage and income growth nationally, rental affordability has suffered. “Rent value increases have broadly outpaced wage and income rises at the national level, meaning rental affordability has also deteriorated,” explained Owen.

In March 2020, a gross household income could afford the median rent by allocating 26.7% towards it. In September 2023, this proportion increased to 31%. Owen noted that although a larger portion of income is required for servicing new mortgages, “renters tend to be on lower incomes,” which makes the situation even more challenging for them. Additionally, “The latest data from the ABS suggests median gross household income was 41.8 per cent lower across renting households than owner-occupiers with a mortgage.”

The situation appears more severe in metropolitan areas, with Sydney’s median rent soaring to $745 a week, and certain neighborhoods experiencing median weekly rentals surpassing the $1,000 threshold. In a contrast, Hobart saw its median rent drop to $535 per week following a 3.5% decrease last year, marking it as the city with the cheapest median ren