Rental affordability has worsened in the past 12 months, hitting its lowest level since at least 2008, when records began, according to the PropTrack Rental Affordability Index.
Rental affordability is toughest in New South Wales, though most other states are not far behind. Victoria is the only exception and is Australia’s most affordable state for renters. While Victorian rental affordability has worsened significantly since 2021-22, it has not deteriorated as sharply as other states. As a result, Victorian rental affordability is still around the levels it was in the mid-2010s and remains more favourable than other states.
The deterioration in affordability has been driven by the significant increase in rents that we’ve experienced in the past four years.
Read the full report here: REA Group Rental Affordability Report - 2025
While affordability is currently at its worst level on record, rental market conditions are showing signs of easing. Rental availability improved during 2024 in most capitals. Rent growth, while still brisk, was slower in 2024 than the pace recorded in 2022 and 2023, a trend we expect will continue in 2025.
This report quantifies the challenging state of rental affordability across the country, particularly for low-income renters.
Surging rents in the past few years mean renters across Australia are now facing the worst level of rental affordability in at least 18 years.
The PropTrack Rental Affordability Index shows that, in the six months from July to December 2024, households across the income distribution could afford to rent the smallest share of advertised rentals since at least 2008, when our records began.
While rents grew slower in 2024 than in 2023, growth in rents still outstripped income growth, which has further worsened already challenging rental affordability.
The current alarming state of rental affordability is a substantial deterioration from conditions before and during the pandemic.
The previous low-point in rental affordability came in 2009-10, owing to slow income growth after the Global Financial Crisis. However, in the subsequent decade, rental affordability gradually improved as rents increased at a slower pace than incomes, reaching a high point nationally in 2020-21. This followed the initial stages of the pandemic when rents decreased in Sydney and Melbourne – the two largest rental markets.
However, that was not the experience in all parts of the country. Many smaller states and regional areas experienced strong rental demand, rent increases and worsening affordability from the early stages of the pandemic.
Households in New South Wales and South Australia are facing the toughest rental affordability across the country. Other states are only marginally more affordable, except for Victoria, which is the most affordable state for renters by some margin.
Rental affordability in New South Wales has not deteriorated as sharply as in some other states, in part because it was already worse prior to the pandemic. Even so, NSW remains the least affordable state in Australia in which to rent – a position it has held for all but four of the past 18 years, when it was briefly overtaken by Tasmania. In large part, this reflects how high rents are in Sydney: $780 for a house and $700 for a unit, which is substantially more expensive than elsewhere in the country.
Renters in South Australia are facing extremely strained rental affordability. This represents a sharp change, as South Australia was the second-most affordable state in the years prior to the pandemic. That said, the differences in rental affordability between South Australia, Tasmania, Western Australian and Queensland are small.
Victoria stands out as the most affordable state to rent in by some margin. This is a relatively recent development as Victoria was the second-least affordable state for renters as recently as 2016-17. This change in relative affordability reflects that rents in Melbourne haven’t grown nearly as quickly as other parts of the country since 2020.
With median advertised rents sitting at $570 per week at the end of 2024, it is the second-cheapest city to rent, despite its relatively high incomes. And while Melbourne rents are 32% higher than March 2020, this is far below the 48% growth recorded nationally.
Underscoring the dire state of rental affordability, a household earning the median (or typical) income in Australia of $116,000 could afford just 36% of rentals advertised over July-December 2024. This is, by a reasonable margin, the lowest share since records began in 2008, and a further drop from the (already lowest-on-record) 40% that households could afford in 2023-24.
This represents a substantial decline from favourable affordability conditions in the late 2010s and into 2020-21. Nationally, a median-income household could afford 60% of advertised rentals in 2020-21 and 55% in 2021-22, the highest and equal-second-highest share on record, respectively.
Even relatively high-income households earning about $177,000 a year — the top 30% of Australians — are facing more challenging rental conditions than they have in some time. These households could afford 83% of advertised rentals in 2024-25, though this varies across states – from as high as 91% in Victoria to 78% in New South Wales. This represents the lowest share for high-income households on record, falling below the previous low in 2008-09.
For more, including state-by-state analysis, and affordability for households of different types and ages, including low income renters, see the full REA Group Rental Affordability Report - 2025.
