Rental affordability at a nine-year low

A new report has revealed rental affordability is at a nine-year low. The finding doesn't come as a surprise to many across Australia who are sacrificing large portions of their salary to rental payments.

Amidst the rising cost-of-living expenses, husband and wife Felicito and Gyllen Sanchez recently moved to their new rental unit in western Sydney, allotting less than half of their single income to pay for their rent. Credit: Ivan Samkov (via Pexels) and Gyllen Sanchez

Key Points

• A new report from ANZ and Corelogic has found that an under-supply of rental accommodation and an increase in renters is leading to significantly higher prices.
• Rental affordability is most strained in Hobart and Adelaide. Large cities like Sydney and Melbourne are in fact more affordable, relative to income.
• New western Sydney renters Gyllen Sanchez and her husband, Felicito, depend on their single income, with less than half their budget allotted for paying their rent.

Amidst the rising cost-of-living expenses, husband and wife Felicito and Gyllen Sanchez recently moved to their new rental unit in western Sydney, allotting less than half of their single income to pay for their rent. Credit: Ivan Samkov (via Pexels) and Gyllen Sanchez

Rental affordability is at a 9-year low, and households across the country are feeling the strain

According to the ANZ and Corelogic report, the portion of income required to service rent has increased across the country since the start of the pandemic.

Head of Research at Corelogic, Eliza Owen, explains:

"With 32% of income required across Sydney to service rents and around 26% across Melbourne. If you compare that with smaller capital cities, like Hobart for example, 34% of income is required to service typical rents in that city."

 

International student Gyllen Sanchez arrived in Sydney in June 2022. She and her husband Felicito lived with Gyllen's sister until they moved out and started their renting journey.

"We are lucky that we got approved in our application for a two-bedroom, one-bath unit for $370," Gyllen Sanchez shares.

'At the median level, a recent study estimates that households would need to spend about 31% of their income to pay for typical rents. If you look at the lower end of the income and rental spectrum, or what we would call the 25th percentile, you're looking at around 51% of income needed to service rent.' Credit: Getty Images

The couple were fortunate that it only took them more than two weeks to get rental approval as they are aware that it's tough competition considering there's an increase in the number of renters while under-supply of rental accommodation continues to be a problem across Australia.

"I know it's a tedious and long process to go into the rental market, it takes a lot of time and effort to attend house inspection and go through the application process," Gyllen points out.

She stresses that "you just have to be patient and try to apply for a multiple of rentals as there are really a lot of people who are looking for rental properties".

"Try to be open-minded as well and consider a variety of properties when it's your first time renting, especially if you are an international student like me."

Sydney still comes in as the most unaffordable market for home ownership, with Sydneysiders needing more than half of their income to service a new mortgage.