REA Group’s data business PropTrack launched a new comprehensive measure of the share of rental properties that households can afford to lease earlier this month. The PropTrack Rental Affordability Index analyses rental affordability across different household income distributions and locations.
The report showed that rental affordability is now at its worst level in at least 17 years, when PropTrack records began, driven by the surge in rent prices following the pandemic.
Low- and middle-income households are facing the toughest conditions. A household earning $49,000 per year – the 20th percentile of income – can afford essentially no rental properties.
PropTrack senior economist and report co-author, Angus Moore, said: “Surging rents over the past few years have resulted in rental affordability sitting at its worst level in at least 17 years.
“Over the six months to December 2023, households across the income distribution could afford to rent the smallest share of advertised rentals since at least 2008, when our records began. That is a substantial change from conditions before and during the pandemic.
“The deterioration in affordability has been driven by the significant increase in rents that we’ve seen since the pandemic, which wages have not kept pace with. Rents nationally are up 38% since the start of the pandemic.
“At the lower end of the income distribution, renting is extremely challenging. This highlights the importance of rental support for low-income renters, such as Commonwealth Rent Assistance. Without support, renting would be effectively impossible for many of these households.
“Longer term, increasing the availability and supply of rentals is critical to improving affordability. Rents are growing quickly because rentals are extremely scarce at the moment, with incredibly low rental vacancy rates around the country. The only way to solve that, sustainably over the long term, is to have more rentals where people want to live. And that means building more homes.”
For more information and to view the full report please visit realestate.com.au/insights
