Rent has increased by 36% nationally since Covid, CoreLogic finds, which equates to an extra $171 a week on average
Even Australians on median incomes are in rental stress, a new report has found, with households on middle incomes spending 33% of their wages on housing.
Last year saw the smallest annual rental increase since 2021, going up 4.8% over the year – down from 8.1% in 2023, CoreLogic’s report found.
But since the onset of Covid, rents have increased by 36.1% nationally, equivalent to a rise of $171 a week, or $8,884 a year at the median level.
Housing advocates say out-of-reach house prices and growing rents mean the system is in crisis. With 10,000 new people accessing homelessness services each month, they are calling for governments to introduce a cap on rent increases.
CoreLogic economist Kaytlin Ezzy said as of September 2024 households on a median income now have to spend 33.0% of their pre-tax income to service the median rent, the highest percentage since CoreLogic started tracking rental affordability in 2006.
“The net result has potentially seen some prospective renters delay their decision to leave the family home,” she said.
“Others have looked to form larger share households as a way of distributing the additional rental burden, unwinding the previous shrinking in the average household size that was apparent through the early stages of Covid.”
This push to larger households can also be seen across property types, with houses recording both stronger quarterly (0.6%) and annual rent rises (5.0%) compared with the unit sector (-0.2% and 4.2%, respectively), the report said.
By December the median rent on realestate.com had surged 11.5% over the year to $580 a week.
Looking across the country, rental growth was higher in regional areas, up 1.2% over the quarter and 6.2% over the year. By comparison, the combined capital cities recorded a milder 0.1% quarterly increase and a 4.3% rise over the 12 months to December.
Maiy Azize, a spokesperson for housing campaign Everybody’s Home, said while the growth may be slowing the pain is still being felt on the ground.
“We need limits on rent increases,” Azize said. “Australia is one of the only developed countries where unlimited rent increases are legal. Only the ACT has legal limits, and the numbers show that it’s working – Canberra is the only capital city where rents are stable.”
She said it was clear the private sector had failed to provide stable affordable housing, and called on the government to build more social homes.
“For years governments have avoided taking responsibility for housing, relying on the private sector to deliver affordable homes. These numbers show that’s a dangerous approach. Only the federal government can provide affordable homes for the people who need them, when and where they need them.
“Australia’s social housing shortfall is massive. The government needs to build 25,000 new homes across the country every year to end the social housing shortfall and bring down rents across the board.”
