The rent price index in Australia in the fourth quarter of 2023 was 113.2, marking an increase from the same quarter of the previous year. Rent prices had decreased in 2020; in Melbourne and Sydney, this was mainly attributed to the absence of international students during the coronavirus outbreak.
The current state of the rental market in Australia
The rental market in Australia has been marked by varying conditions across different regions. Among the capital cities, Sydney and Melbourne have long been recognized for having some of the highest average rents. As of December 2023, the average weekly rent for a house in Sydney was 730 Australian dollars, which was the highest average rent across all major cities in Australia that year. Furthermore, due to factors like population growth and housing demand, regional areas have also seen noticeable increases in rental prices. For instance, households in the non-metropolitan area of New South Wales’s expenditure on rent was almost 30 percent of their household income in the year ending June 2023.
Housing affordability in Australia
Housing affordability remains a significant challenge in Australia, contributing to a trend where many individuals and families rent for prolonged periods. The underlying cause of this issue is the ongoing disparity between household wages and housing costs, especially in large cities. While renting offers several advantages, it is worth noting that the associated costs may not always align with the expectation of affordability. Approximately one-third of participants in a survey conducted in 2023 stated that they pay between 16 and 30 percent of their monthly income on rent. Recent government initiatives such as the 2024 Help to Buy scheme aim to make it easier for people across Australia to get onto the property ladder. Still, the multifaceted nature of Australia’s housing affordability problem requires continued efforts to strike a balance between market dynamics and the need for accessible housing options for Australians.