A typical income-earning family could afford just 37% of rental properties on the market, new research has revealed, as rental affordability hits its lowest level on record.
The dire state of Australia's rental market has been laid bare in the latest realestate.com.au Rental Affordability Report, which found rental prices rose a further 5% in the December quarter of 2025 to be 55% higher than at the start of 2020.
Following years of strong rental growth, national median advertised rents hit $650 at the end of 2025, up from $420 before the pandemic.
REA Group executive manager of economics and report author, Angus Moore, said Australian renters are facing the toughest conditions since at least 2008, when records began.
“A median income household in Australia could afford to rent just 37% of the advertised rentals on realestate.com.au between July and December 2025," Mr Moore said.
“Since the onset of the pandemic, national rent prices have grown 55%, and income growth has failed to keep pace, lifting just 25% over the same period. This imbalance has worsened rental affordability.
On top of that, Mr Moore said rent prices have grown faster for more affordable properties.
“Thankfully, there are signs conditions are improving for renters. Rental availability improved over 2025 in most capitals, and rent growth, while still solid, has slowed from the peaks seen in 2022 and 2023."
"However, rental affordability will remain at incredibly low levels in the year ahead.”
South Australia is one of the least affordable states for renters, behind only New South Wales. Picture: Getty
For lower-income households earning just under $75,000 per year, the report showed just 2% of rentals would have been affordable in recent months.
Households in New South Wales and South Australia are facing the toughest rental affordability across the country, though Mr Moore noted other states are only marginally more affordable.
Ranked from least affordable to most affordable. Source: realestate.com.au Rental Affordability Report
Victoria was the only state to see rental affordability improve over the past 12 months, holding its place as the most affordable state for renters by a wide margin, he said.
Older Australians most vulnerable in tight rental market
For 85 year old South Australian Maddie Long, homeownership is not an option, but she considers herself one of the lucky ones, having rented the same two-bedroom unit in Adelaide’s Kings Park for more than three decades.
In 1970, Ms Long and her then-husband bought a house together in Adelaide after years of renting. But when the marriage ended in 1979, while she was studying social work part-time and raising children, the course of her housing life shifted.
Ms Long stayed in the family home, paying half the mortgage, until her youngest son turned 18. Once the house was eventually sold, she received half of what was left, a ‘Supporting Parent’s Benefit’ and rent relief. Curious about whether home ownership was still possible, she went to the bank.
“The bank manager said there wouldn’t be any way in a million years they’d give me a loan because I didn’t have a full-time job,” she said.
After leaving the family home, she first rented a place by the beach, before moving to the near-city unit she still lives in today. A couple of years after she moved in, it went up for sale. She could, she says, probably have bought it then - but only by leaving herself with nothing to fall back on.
“I don’t like being without a buffer,” she said. “I don’t need to own things, but I do need somewhere to live, and I need to feel safe there.”
Nowhere is that more apparent than in her relationship with her landlord. Over time, the arrangement has become something rarer than a standard tenancy. There is no managing agent between them. They deal directly. She says he once told her: “While you’re living here, it’s yours.”
That matters. So does the rent. Maddie still pays $260 a week. According to realestate.com.au's latest Market Insight report, the median unit price in Adelaide reached $550 in the December quarter, and $630 for houses.
Rental prices across the country. Source: realestate.com.au Market Insight
In a rental market where affordability is tight and competition remains intense, that kind of trust and goodwill can matter enormously - even if arrangements like Maddie’s are increasingly rare.
“The personal relationship is a big part of the security,” she said. “We respect each other.”
Her story sits against a broader and less reassuring backdrop. Grattan Institute analysis found that 67% of retired households renting privately live in poverty after housing costs, rising to 78% for single women.
Older women who are separated or divorced are also more than three times as likely to be renting at age 65 as married women.
Ms Long's back patio. Picture: Supplied
Ms Long said she could not enter the rental market now:
“If I was paying $400 a week, then I would barely have enough money to run a car or do anything else too.”
“I realise that I’ve been looked after. I’ve always had somewhere to live.”
English (US) · 