Rental affordability crisis: Low-income households struggle as rents hit record highs

In a stark revelation of the ongoing rental affordability crisis in Australia, new research has highlighted the severe challenges faced by typical income-earning families, who can now afford only 37% of available rental properties. The latest realestate.com.au Rental Affordability Report paints a grim picture of the rental market, where prices have surged by 55% since the start of 2020, reaching an unprecedented national median advertised rent of $650 by the end of 2025.

Angus Moore, the executive manager of economics at REA Group and the author of the report, provided a sobering assessment of the current rental landscape. “Australian renters are facing the toughest conditions since at least 2008, when records began,” he stated. “A median income household in Australia could afford to rent just 37% of the advertised rentals on realestate.com.au between July and December 2025.”

The disparity between rent increases and income growth has exacerbated the situation. “Since the onset of the pandemic, national rent prices have grown 55%, and income growth has failed to keep pace, lifting just 25% over the same period. This imbalance has worsened rental affordability,” Moore elaborated. He also noted that rent prices have climbed more steeply for properties that were already considered affordable.

Despite these challenges, Moore pointed to some positive developments. “Thankfully, there are signs conditions are improving for renters. Rental availability improved over 2025 in most capitals, and rent growth, while still solid, has slowed from the peaks seen in 2022 and 2023,” he said. However, he cautioned that “rental affordability will remain at incredibly low levels in the year ahead.”

The report highlights that lower-income households, earning just under $75,000 per year, face an even bleaker scenario, with only 2% of rentals considered affordable in recent months. New South Wales and South Australia emerged as the least affordable states for renters, with Victoria being the sole state to witness an improvement in rental affordability over the past year. Victoria remains the most affordable state for renters by a significant margin.

The impact of this rental affordability crisis is particularly harsh on older Australians, many of whom find themselves vulnerable in the current market. One such individual is 85-year-old Maddie Long from South Australia. Homeownership is not an option for Long, but she considers herself fortunate to have rented the same two-bedroom unit in Adelaide’s Kings Park for over three decades.

Reflecting on her journey, Long recounted how her housing circumstances changed after her marriage ended in 1979. Despite her efforts to explore homeownership, she was met with resistance from financial institutions. “The bank manager said there wouldn’t be any way in a million years they’d give me a loan because I didn’t have a full-time job,” she recalled.

Long eventually settled into her current rental unit, which she could have purchased when it went up for sale a few years after she moved in. However, the financial risk was too great. “I don’t like being without a buffer,” she explained. “I don’t need to own things, but I do need somewhere to live, and I need to feel safe there.”

Her relationship with her landlord has become more personal and trusting over the years, a rarity in today’s market. “While you’re living here, it’s yours,” her landlord once told her, a sentiment that has provided her with a sense of security. Long’s rent remains at $260 a week, a stark contrast to the median unit price in Adelaide, which reached $550 in the December quarter, according to realestate.com.au’s latest Market Insight report.

In a market where affordability is scarce and competition fierce, such trust and goodwill are invaluable, though increasingly uncommon. “The personal relationship is a big part of the security,” Long emphasised. “We respect each other.”

The broader context of Long’s story is troubling. Analysis from the Grattan Institute reveals that 67% of retired households renting privately live in poverty after housing costs, a figure that rises to 78% for single women. Older women who are separated or divorced are also more than three times as likely to be renting at age 65 as their married counterparts.

Long acknowledges the difficulty she would face if she were to enter the rental market today. “If I was paying $400 a week, then I would barely have enough money to run a car or do anything else too,” she said. Despite the challenges, she remains grateful for her situation. “I realise that I’ve been looked after. I’ve always had somewhere to live.”