Australia\u2019s \u201cdire\u201d rental market has plummeted to its lowest affordability level since 2008 and is heaping pressure on soaring inflation.<\/p>\n
Realestate.com.au\u2019s latest Rental Affordability Report showed about one third of the nation\u2019s rentals were deemed affordable for a typical household.<\/p>\n
Renters in NSW and South Australia were faring the worst with just 25 per cent and 19 per cent of rentals affordable for typical income households.<\/p>\n
The financial strain that rents heap onto households has flowed through to Australia\u2019s surging inflation, REA Group senior economist Angus Moore said.<\/p>\n
\u201cThat pressure that we’re seeing on rents absolutely is speeding through into inflation and it is part of why inflation is as sustained as it’s been,\u201d Mr Moore told Business Weekend.<\/p>\n
The alarming revelation comes as inflation remains elevated at 3.8 per cent and is expected to rise while oil supply shortages add to stringent price pressures.<\/p>\n
Housing inflation soared 6.8 per cent in the year to January and was one of the largest contributors to the price rises, according to the Australian Bureau of Statistics.<\/p>\n
Rents lifted 3.9 per cent while new dwelling inflation jumped 3.5 per cent and electricity costs boomed 32.2 per cent after power rebates discontinued.<\/p>\n
Inflation remaining well above the Reserve Bank of Australia\u2019s 2-3 per cent target has forced the central bank to hike the cash rate twice since the year began.<\/p>\n
Mr Moore said improving rental affordability can only come from boosting the number of homes available for rent, but admitted there continued to be challenges plaguing the nation.<\/p>\n
\u201cFor a variety of reasons that’s been challenging over the last five or six years,\u201d he said.<\/p>\n
\u201cConstruction costs have been a challenge, labour has been a challenge and now increasingly interest rates are a challenge too.<\/p>\n
\u201cThat doesn’t feed through into rent prices next month (or) in the next six months, but it does feed through into how many homes we’re building over the next four or five years and therefore what rental markets could look like over the four-or-5-year horizon.\u201d<\/p>\n
Realestate.com.au’s report also found that rent price growth of five per cent over the year offset any income growth and deteriorated affordability further.<\/p>\n
Victoria was the only state where rental affordability improved over the past 12 months.<\/p>\n
\u201cVictoria stands out as a remarkably affordable place for renters and actually affordability improved in the past 12 months, so it’s bucking the trends a bit,\u201d Mr Moore said.<\/p>\n
While most of the nation grapples with poor rental affordability, the report showed that rental availability improved throughout 2025 in most capitals.<\/p>\n
It also revealed that rent growth has slowed from its peaks seen throughout 2022 and 2023.<\/p>\n","protected":false},"excerpt":{"rendered":"Australia\u2019s \u201cdire\u201d rental market has plummeted to its lowest affordability level since 2008 and is heaping pressure on…\n","protected":false},"author":2,"featured_media":555991,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[274602,64,63,99,164,5465,274600,1003,32367,10926,274599,11135,123181,274601],"class_list":["post-555990","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-angus-moore","tag-au","tag-australia","tag-business","tag-economy","tag-inflation","tag-melbourne-renting","tag-real-estate","tag-realestate-com-au","tag-rental-affordability","tag-rental-affordability-report","tag-renting","tag-rents","tag-sydney-renting"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/555990","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=555990"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/555990\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/555991"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=555990"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=555990"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=555990"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}