What is the average rent in Australia?
It’s hard to ignore news about the rental crisis in Australia. Recent years have seen rental prices skyrocket nationwide, with headlines about dwindling vacancy rates and competition over real estate.
With home loans feeling out of reach for many Australians, the rental market is an incredibly important element of the larger property market. The past year has seen a shift to a new normal in a post-pandemic world, with interest rates increasing, the cost of living soaring, and average rent prices sent off the charts.
To find the average rent in Australia, we need to consider the cost of renting in all of Sydney’s major capital cities, as these can be considerably different to the rental costs of a regional property. We’ve looked at the cost to rent of both houses and units, with data from the Australian Bureau of Statistics (ABS) and rental reports from CoreLogic and Domain.
Thankfully, we are gradually starting to see news of a softening rental market, although this relative to the extreme conditions we’ve seen in major Australian cities. April and May have seen slight lifts in the rental vacancy rate, rising to 1.1% nationally.
Average rent around the country
The median weekly rent in Australia looks dramatically different depending on whereabouts in the country you live. 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
- Combined capital cities - houses: $615
- Combined capital cities - units: $550
This is further broken down in each state.
Currently, across all Australian cities, Sydney and Canberra take out the title of Australia’s most expensive for renters. Sydney is also the most expensive city in terms of house prices, while Darwin is the cheapest city to buy a home. CoreLogic’s Quarterly Rental Review shows that the national rental index has risen by 10.1% nationwide in the past 12 months.
Jump to your state to find the median rental price for a house and an apartment in the greater metropolitan area of each capital city.
- New South Wales (NSW)
Sydney rental vacancy rate: 1.2%
NSW average weekly salary: $1,810.20
Median weekly rent — House: $747
Median weekly rent — Unit: $648
- Australian Capital Territory (ACT)
Canberra rental vacancy rate: 2.0%
ACT average weekly salary: $2,019.10
Median weekly rent — House: $712
Median weekly rent — Unit: $585
- Victoria (Vic)
Melbourne rental vacancy rate: 0.7%
Victoria average weekly salary: $1,793.90
Median weekly rent — House: $545
Median weekly rent — Unit: $504
- Queensland (QLD)
Brisbane rental vacancy rate: 1.1%
QLD average weekly salary: $1,760.70
Median weekly rent — House: $628
Median weekly rent — Unit: $523
- South Australia (SA)
Adelaide rental vacancy rate: 0.3%
SA average weekly salary: $1,658
Median weekly rent — House: $552
Median weekly rent — Unit: $443
- Western Australia (WA)
Perth rental vacancy rate: 0.6%
WA average weekly salary: $1,988.55
Median weekly rent — House: $582
Median weekly rent — Unit: $505
- Northern Territory (NT)
Darwin rental vacancy rate: 1.8%
NT average weekly salary: $1,744.10
Median weekly rent — House: $646
Median weekly rent — Unit: $505
- Tasmania (Tas)
Hobart rental vacancy rate: 1.7%
Tasmania average weekly salary: $1,586.40
Median weekly rent — House: $571
Median weekly rent — Unit: $505
Remember that these rental prices the inflated rent of inner city areas and that the price of renting a one-bedroom apartment in the city centre may be vastly different to the same property in a regional area of the state.
The choice of suburb can also make a dramatic difference in rental prices. The median house rental price for Vaucluse, one of the most expensive suburbs in Sydney, Australia’s most expensive city for rentals, hovers around $2,859. Looking at the cheapest suburb to rent a house in Sydney, you would find Treagar, where the median house rent is $466 per week.
How can OwnHome help renters become homeowners?
OwnHome's goal is to help more Aussies get out of the rental cycle and into their own homes.
OwnHome’s Deposit Boost Loan bridges the 20% deposit gap, making homeownership possible for people that do not have the full lump sum available. With only 2% down, you could access a standard 80% LVR mortgage - offering you a better interest rate while lowering your upfront costs by up to 5 times.
What type of properties are Australians renting?
While you might think of the average renter as a young professional, the rental market in Australia comprises all sorts of demographics renting all types of homes. Census data shows us that homeownership rates are trending downwards in Australia, dropping from 70% in 2006 to 67% in 2021. Aussies are also now renting in all areas of the country, not just densely populated capital cities.
With growing demand has come a surge in unit rent pricing, outpacing the growth rate of house rent. Nationally, we’ve seen apartments grow 3.9% in the past quarter, compared to the housing rent growth of 2%.
Rental growth in the combined capital cities has grown at more than double the rate of the rest of Australia combined in 2023, rising by 3% to regional rent growth of 1.2%.
We can also see the high level of rental stress that comes with tenancy. Rental stress is generally defined as the financial instability that comes with more than 30% of your income being put towards your rental payments.
Looking at the average wages in each state alongside the median rental prices, we can calculate that the average unit renter in Sydney and in Hobart is already experiencing rental stress (paying 35% and 31.8% of the average income for rent respectively).
A report by CoreLogic on Australian rental affordability places the proportion of median household income needed to service rents has lifted to 30.8% nationally, indicating a much larger level of rental stress. Since the start of the rental upswing, weekly rents have grown by an average of $115.
Current influences on the Australian rental market
A few factors have contributed to the rising prices of rental properties at the moment, all of which we can see culminating in today’s record prices and low availability. Some of these include the following:
- Less tolerance for communal living: A major impact of the Covid-19 pandemic has been a decrease in willingness to live in larger shared housing. With more and more people looking for smaller homes for themselves and their direct families, along with recently opened floodgates for immigration, there has been a large increase in demand for rental properties.
- Movement back to city centres: While the pandemic saw a heightened rate of urban-to-regional migration (with unprecedented growth in areas like coastal NSW and the Gold Coast), decreasing support for remote work means we can expect this population to return to inner city hubs.
- Rising interest rates: Though not directly proportional to rental cost increases, the past year of interest rate hikes has left many investors with increased mortgage repayments. This means that to keep up, some rent adjustments need to be passed on. That said, we have seen rental increases uniformly across all rental properties, not just ones with standing mortgages.
- Wage stagnancy and inflation: Relative to inflation, wages in Australia have remained stagnant — unable to keep up with the climbing rental prices. ABS data for 2022 had annual wage growth at 3.3%, which was a 4.5% fall when adjusted for inflation. Meanwhile, Proptrack data shows a minimum 3% growth in median weekly house rent across all of Australia’s capital cities (with an average of 11.1% growth overall for houses, and 12.5% growth for units).
- Extremely low vacancy rates: With such a competitive market, it’s unsurprising to see such low vacancy rates across the country. In most cities, they have continued to drop: the average vacancy rate across capital cities has an annual decline of a further 0.66%, with the only improvements in Adelaide, Darwin, Hobart, and Canberra. Thankfully this is beginning to turn around, vacancy rates remain low, allowing rental costs to remain high.
- Limited sense of agency: While a too-high rate on a home loan can be renegotiated or refinanced with a different provider, renters often experience disenfranchisement that comes with a lack of choice. With such limited availability, they are unable to necessarily move in the face of rent increases or poor conditions. Options for tackling unreasonable rental increases may be daunting or costly (involving legal action).
Is there a way out of the rental market maze?
With the current crisis, many renters may feel locked into the rental market without much sign of things changing. Unlike the property market, which has ebbed since the pandemic peaks, the rental crisis shows no sign of slowing down, with increases continuing to hit tenants.
This could serve to benefit investors operating as landlords but could also keep many people locked out of the housing market for longer, unable to save up home deposits.
Suggestions for helping with the current situation across Australia involve funding the construction of new homes and rental-purpose housing. The pandemic also saw the beginnings of some regulations around rental increases concerning frequency and amounts, and the federal and state governments continuing these conversations could help to ease the burden on both landlords and tenants.
Tighter rental regulations may also dissuade investors from purchasing rental properties, adding to the issue of limited rental supply. This is a dire issue, as the supply of Australian capital city rental listings in April 2023 is 20.9% below the level recorded at the same time last year.
Meanwhile, if you have been served with unreasonable hikes to your rental prices, it may be worth contacting your landlord or real estate agent, as you may be able to find some balance. This is a short-term solution but can be helpful in immediate situations.
In the long run, it looks as though rent will only continue upwards, and until wages begin to rise in turn — or entering the housing market becomes more accessible — there seems to be more struggle on the horizon for the nation’s renters.