After years of declining affordability, rents have begun to stabilise across Australia, according to the latest Rental Affordability Index (RAI). This 11th edition of the Index – launched by National Shelter, SGS Economics and Planning, and Housing All Australians in late November – shows affordability pressures remain high, particularly for people living on lower incomes.
With the RAI launched in 2015, this year’s index is the first to highlight changes in rental affordability across Australia over a 10-year period, providing a long term, in depth understanding of trends in rental affordability. In all jurisdictions, excluding the ACT, rental affordability has worsened overall in the last ten years. In NSW, Greater Sydney’s RAI score has decreased from 103 to 100 while regional NSW has seen a marked, 15-point decline, from 114 to 99. The worst decline in affordability has occurred in regional QLD, which has seen its RAI score decreasing by 27 points; from 121 to 94.
Sydney trails Perth as Australia’s least affordable city, with a median weekly rent of $750. Similarly, the ‘Rest of NSW’ trails the ‘Rest of QLD’ as the least affordable area outside of capital cities, with respective scores of 94 and 99, meaning households earning a median income must spend slightly over 30% of their income to afford a home, tipping them into housing stress. Concerningly, for people earning below the median income such as essential workers, pensioners and others on social security incomes, and those needing larger homes such as parents, much of Greater Sydney and NSW remains severely unaffordable.
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| The latest edition of SGS/National Shelter Rental Affordability Index shows that rental affordability continues to deteriorate across Greater Sydney and beyond as rent increases continue to outpace income growth. 2015 RAI (left) compared to 2025 RAI (right). |
While this report can make for sombre reading, the stabilisation of rental (un)affordability is a welcome reprieve for the millions of renters nationwide. NSW would do well to look to the ACT and Greater Melbourne and examine the causes of their recent successes in slowing down deterioration of affordability.
Shelter NSW maintains its position that the best – and most cost effective – response to deteriorating rental affordability is continued investment in social housing from both state and federal governments to ensure people on lower incomes can afford to live where they need to. Expanding the non-market housing sector will also place downward pressure on rents and hopefully set a best practice standard, assisting renters the country over.
The 11th edition of the Rental Affordability Index can be read here.