Analysts say open borders and increased migration have driven demand for real estate – and increases in rental prices. What matters for rents, as for any price, is the demand for and the supply of the product being priced. More demand (more renters wanting properties) and the price climbs.
One problem contributing to the crisis is soaring rental prices. Thanks to rising interest rates and the cost of living, landlords have had to increase rents to keep on top of mortgage repayments, which doesn't help those trying to find an affordable place to rent.
Most experts agree that you shouldn't spend more than 30% of your after-tax pay on rent. Of course, depending on your location, your income and your other expenses, keeping your rent to 30% of your income may not always be possible.
Domain's Rent Report for the December 2022 quarter reveals Canberra remains the country's most expensive city to rent a house at the median rate of $690-per-week.
Average rent around the country
A 2023 CoreLogic rental report lists the median weekly rent as $570 across all dwellings, or $594 in capital cities. Continuing on a national scale but looking at dwelling types, we can see that median weekly rent is currently: Nationally: $582 for a house. Nationally: $540 for a unit.
In 2023, it is predicted that rent prices will continue to increase due to the low rental vacancy rates and high demand for rental properties caused by vacancy rates and seasonal fluctuations. Low vacancy rates can typically lead to higher rents as landlords have the advantage.
Outside Sydney and Melbourne, life can be relatively affordable, but a good basic standard is to use $600 per week as a starting point for a minimal lifestyle for an individual, and add one-third for Sydney and Melbourne or about 10 percent for the other major cities.
The richest Aussies live in Sydney, ATO data has found.
Double Bay took out the top spot, living up to its 'Double Pay' nickname, with residents of the 2028 postcode raking in an average annual income of $266,381.
Of the top 10 richest postcodes, 1 is located in Western Australia, 1 is located in Victoria and the remaining 8 are all located in some of the most exclusive spots across Sydney. At the top of the list is Western Australia's 6011 postcode, which comprises Cottesloe and Peppermint Grove.
Melbourne has beaten Sydney by one ranking in the age-old battle of the most liveable city, according to the June 2023 liveability survey by the Economist Intelligence Unit (EIU). The Victorian capital shot up to third behind Vienna and Copenhagen, and Sydney also jumped several places to fourth.
The average annual salary in Australia is $68,900 and $35.30 per hour. It is just the average salary for basic workers but skilled and experienced workers also earn around $108,980 annually. The average salary also varies depending on the field of work and the job role of workers.
Try the 30% rule. One popular rule of thumb is the 30% rule, which says to spend around 30% of your gross income on rent. So if you earn $3,200 per month before taxes, you should spend about $960 per month on rent.
The National Minimum Wage
This is the minimum pay rate provided by the Fair Work Act 2009 and is reviewed each year. As of 1 July 2023 the National Minimum Wage is $23.23 per hour or $882.80 per week.
Supply and demand imbalance
One of the primary reasons for high house prices in Australia is the imbalance between supply and demand. Housing supply is under ongoing strain due to an increasing population and a limited land supply, particularly in large cities like Melbourne and Sydney.
Price growth in Sydney's housing market has been fuelled by population growth, an undersupply of housing and higher levels of investor activity. Geographical constraints and planning restrictions have also limited the expansion of the land stock suitable for housing.
The ANZ CoreLogic housing affordability report has found rental affordability – the portion of income required to service a new lease – is at its highest level nationally since June 2014, with 30.8% of an average income required to service a new lease.
The 10 most disadvantaged LGAs in order are: Woorabinda (Queensland), Cherbourg (Qld), Belyuen (NT), West Daly (NT), Yarrabah (Qld), Kowanyama (Qld), Wujal Wujal (Qld), East Arnhem (NT), Doomadgee (Qld) and Central Desert (NT).
To be considered in Australia's highest percentage of wealth, you must have a total net worth of a staggering US$5.5 million (A$8.26 million).
Among all the states and territories in Australia, New South Wales is considered the richest state. It has the largest economy, a diverse range of industries, and a higher-than-average income, which contribute to its status as the wealthiest state.
Mungallala Methodist Church was built in 1964. It has now closed. In 2016, the Australian Taxation Office listed Mungallala as having the lowest mean taxable income by postcode, making it the poorest town in Australia, which led the ABC to do a documentary on the town for their online "storyhunters" program.
Most of Australia's 19 million people live near the coast, because the inner parts are made up of deserts. 80% of the country's population live in the south-eastern part of the country. Here you can also find the big cities like Sydney and Melbourne, or the capital Canberra.
Australia has plentiful supplies of natural resources, including the second largest accessible reserves of iron ore in the world, the fifth largest reserves of coal and significant gas resources. For a long time, commodities have made up a sizeable share of our exports.
According to Expatistan, this means Australia is one of the most expensive places to live (ranked 10 out of 71). Generally, a higher cost of living means that basic expenses have become – well, expensive.
There is no “one size fits all” plan for all but it is understood that an individual may need approximately $20,000 each year and an average family needs more than $50,000 a year to get by in Australia.
South Australia: Cheapest places to buy a house in Australia
While Tasmania may be the Australian state that is cheapest to buy a house right now, there is another state that may be more affordable, when you consider employment opportunities and income levels compared to home prices and cost of living.