‘Significant fall’ in living standards: Dire prediction as rents soar to new record high in June quarter

Australia’s housing crisis risks spurring a “significant fall” in living standards as rents lifted to another record high in the June quarter.

New figures from property data firm Cotality show rents lifted 1.6 per cent in the June quarter, pushing the median rent to $705 per week.

The cumulative impact of these increases means rents have lifted 40.6 per cent over the past five years, adding a $204 per week burden for would-be homeowners.

SQM founder Louis Christopher warned low vacancy rates were pushing rents up which was forcing tenants to sacrifice a huge amount of their salaries.

He stressed this “demand destruction” could eventually lead to an increase in homelessness.

“Rents as a proportion of incomes just get to a point where the population just simply cannot afford any more,” Mr Christopher told Business Now.

“What you actually see then is more people per dwelling live together, so there’s more sharing going on.

“Unfortunately, there’s more homelessness as well and we cannot rule out that scenario and that represents a significant fall in the standard of living if we do see that play out.”

Cotality’s report showed that rental vacancy rates were stuck at just 1.6 per cent across the nation while listings are 17 per cent below normal levels.

Gerard Burg, Cotality’s head of research, said the steep increases had driven “severe rental affordability constraints”.

“We are seeing a profound shift in affordability across the market. In March this year, the typical household was allocating roughly one-third of their gross income to rent, compared to around 27 per cent just five years ago,” Mr Burg said.

“While quarterly rental growth has eased slightly, the underlying supply deficit means conditions remain incredibly challenging for tenants.”

He also noted that the low vacancy rates meant tenants are left with “very little leverage”.

“Capital city rents rose faster than regional markets this quarter, reversing a trend of regional outperformance seen between late 2024 and early 2026, largely because regional markets are hitting severe affordability ceilings,” he said.

Separate figures from REA Group showed the median advertised rent grew 3.1 per cent to $670 per week.

This lifted rents up 6.4 per cent over the year and the increase was more profound in the capital cities than in regional locations.