NSW tenants have been battling the worst rental conditions on record after the share of rental homes considered “affordable” for average income earners dropped to a new low over the past year.
PropTrack’s latest Rental Affordability Index revealed a household on the median income of $116,000 a year could afford just 26 per cent of the rentals listed on realestate.com.au over July to December.
PropTrack noted that this was the worst affordability measure in the 18 years since rental affordability records began in 2008.
Those on $70,000 a year – placing them among the lowest third of income earners – could afford just 2 per cent of the state’s advertised rental stock, the index revealed.
Renting has become “essentially impossible” for lower income households.
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“For lower-income households, renting is essentially impossible,” said PropTrack economist Angus Moore.
PropTrack classified unaffordable rental housing as a household spending more than a quarter of their pre-tax income on rent.
Mr Moore explained that the deterioration in rental affordability came despite a slowdown in the pace of rent rises over recent months.
“Even though rents have been more stable recently, they have still grown faster than incomes,” Mr Moore said.
Incomes grew by an average of 19 per cent from 2019/20 to 2023/24 while Sydney rents grew by an average of 46 per cent.
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Inner West renters Yatha Jain and Izabella Antoniou are frustrated with the pace of rent hikes. Picture: Max Mason-Hubers
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Rent growth was the fastest for the cheapest properties. Rents in the cheapest 10 per cent of the market went up by 54 per cent over the same period
Rents for the most expensive 10 per cent of properties increased by about 38 per cent.
The runaway pace of rental increases over recent years was part of the reason rents were stabilising, Mr Moore said, explaining that rents in many areas had surpassed what people could pay.
Rental conditions could improve if more housing was built and a recent uptick in investor activity suggested rents could moderate, Mr Moore said.
“The silver lining for renters is that conditions appear to be improving,” he said.
“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.”
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Young tenants protest against rent increases in 2023: rents have risen at a record pace since Covid-era border restrictions ended in 2022. Picture: Lisa Maree Williams/Getty Images
Unaffordable rental housing was particularly problematic for retired households and younger Australians, according to PropTrack.
More than 80 per cent of Aussies in their early 20s rented and someone earning the typical income for this age group would only be able to afford 19 per cent of rentals across Australia.
Close to 13 per cent of households with residents aged 75 and over rented – half from private landlords – but these households often survived on little income.
“For older, retirement-age households, renting is near impossible, given their low incomes,” the PropTrack Rental Affordability Index said.
Renters Yatha Jain and Izabella Antoniou said the lack of security and cost of living pressures made renting “incredibly difficult”.
PropTrack economist Angus Moore said rents are outpacing growth in wages.
Ms Antoniou had recently been evicted on no grounds and said she spent months trying to find an appropriate and affordable rental.
“Looking for a place in my suburb, where my community is, felt impossible,” she said.
“The issue with being a renter is the insecurity and inability to actually feel like you can create a life and a home. And the lack of protections and uncertainty … that you can be rent hiked out of your home at any moment,” Ms Antoniou said.
– With additional reporting by TAYLOR TROETH
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