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REA Group recently released its Rental Affordability Report 2025. Highlighted in the data was the state of rental affordability, which is reportedly at its lowest since the group began tracking in 2008.
Households with a median income of $116,000 could only afford 36 per cent of properties on market between July and December of last year.
The last four years, in fact, were seen as an extremely shocking and a quickly deteriorating time for rental affordability.
NSW was the worst affected area in the country, where renters on a “typical” income could only afford 26 per cent of rentals. In Sydney, renters can expect to pay $780 per week for a house and $700 for a unit.
Following was South Australia, where renters could only afford 20 per cent of the properties advertised. The state went from the second most affordable pre-pandemic to second least affordable currently.
What may come as a surprise is Victoria that is actually the most affordable state for renters, a stark contrast to where it sat in 2016–17 as the second least affordable.
The median rent price is $570 per week in Melbourne, which makes it the second cheapest city. However, rents are still 32 per cent higher than March 2020.
There is a glaring issue with the rental market as REA stated that “typical income households have never been able to afford so few rentals”.
However, there is some relief as according to PropTrack senior economist and report author Angus Moore, conditions are set to improve.
“The current alarming state of rental affordability is a substantial deterioration from conditions before and during the pandemic. Rents nationally are up 48 per cent since pre-pandemic, while typical household incomes have only increased 19 per cent in the same period.
“For lower-income households, renting is essentially impossible. This highlights just how crucial Commonwealth Rent Assistance and community housing is for lower-income Australian households,” he said.
“The silver lining for renters is that conditions appear to be improving. Rental availability, while still limited, is starting to increase and the pace of rent growth is slowing. While rents are still likely to grow this year, we expect the pace of growth will continue to moderate,” Moore added.
Young people are feeling the strain as just 19 per cent of rentals are affordable for a median-income 15–24-year-old household.
What makes things worse is that the more affordable rentals in the 10th percentile have seen rent growth of 54 per cent in the last four years. In contrast, the most expensive portion of rentals has grown 38 per cent in the same period.
Clearly there is a disconnect and more is needed to provide affordable living for Australians. With housing continuing to play a crucial role in the parties’ election promises, there are hopes some real change is on the horizon.
