Average Australian Needs to Earn Over $130,000 a Year to Rent a Typical Home Without Stress: Report

The start reality of renting in Australia has been laid bare as new data sheds light on a glaring lack of affordability.

A 'For Lease' sign is seen at the front of a new house in Sydney, Australia, on Jan. 11, 2024. Jenny Evans/Getty Images

A new report has revealed the extent of the cost of renting in Australia, with costs leaving many people with little left over for food, utilities, and transport.

The Everybody’s Home report found that when average rents are considered, most people would need to earn a gross income of more than $130,000 a year for rent to be within the internationally accepted benchmark of 30 percent of income.

The benchmark exists to ensure renters are not in financial distress; however, soaring rents have made it increasingly difficult to obtain the 30 percent mark.

Across all states and territories, someone earning a modest income of $40,000 a year would have to spend 92 percent of their take-home income to afford the median price of a unit, which is $635 a week.

Even those on $80,000 a week would have to spend 52 percent of their income on rent.

On an income of $130,000 a year, the average Australian would have to use 34 percent of their earnings on rent, still more than the desired amount.

The results are, however, indicative of averages, which vary considerably across the nation.

Case Study

In Queensland’s Gold Coast region, those results are even more severe—someone making $40,000 a year would need to spend their entire net income, plus another 16 percent, on rent.

Concerningly, those earning $130,000 yearly would still be spending 43 percent of their income on rent in the Gold Coast.

At the same time, there are also more affordable regions such as the West Queensland outback, where someone on a $40,000 income would only spend 25 percent of their earnings on rent, and someone on $130,000 would only need to part with 9 percent of their income.

Pedestrians walk past a Commonwealth Bank of Australia (CBA) ATM in Sydney, Australia, on Feb. 26, 2024. Lisa Maree Williams/Getty Images

Middle Earners Struggling

The report showed that capital cities were the worst for rental affordability, with regional areas leaving low—and middle-income owners in financial distress.

Remote areas are primarily unaffordable, mainly due to demand driven by mining.

“These findings underscore a major shift in Australia’s housing market: rental stress is no longer confined to low-income earners,” the report states.

“People on middle incomes are now struggling to find affordable housing.

“The growing housing affordability crisis threatens economic productivity, as key workers and professionals are priced out of cities and regional centres where they are needed most.”

Social Housing Shift

Everybody’s Home has blamed a shift in social housing, which was once reserved for low—to middle-income earners but is now considered mostly for people in dire or special circumstances.

The organisation has called for more substantial investment in social housing.

Everybody’s Home has called for a program to be established that would build 940,000 social homes over the next two decades, based on estimates from the University of New South Wales City Futures Research Centre.

State, territory, and local governments should also incentivise new developments to include more affordable housing.

The think tank also believes that negative gearing for investors and capital gains tax should be phased out, and the resultant funds should be directed back to public housing.

However, Prime Minister Anthony Albanese and some experts have argued against scrapping negative gearing, saying it would negatively impact supply.

“The figures and research that has been produced by organisations like the Property Council indicate that it would reduce supply and therefore not contribute to solving the issue,” he said in 2024.

The heavy costs of purchasing new builds were recently laid bare in a Housing Industry Association (HIA) report that claims Sydney-siders are forking out $576,000—around half the cost of their purchase—in taxes and fees when buying new house and land packages.

The report claimed government fees and taxes were crippling the new housing market, stifling construction.

Building Hope

In Queensland, the Liberal National Party government, led by Premier David Crisafulli, has just restored the Queensland Productivity Commission (QPC), which is set to improve productivity in the construction sector.

Real Estate Institute of Queensland (REIQ) CEO Antonia Mercorella says the move will ultimately lead to lower construction costs and, eventually, greater housing affordability.

“Queensland has seen some of the highest increases in construction costs across the country, with the Producer Price Index for house construction rising by 47 percent from December 2020 to December 2024, compared to 39 percent nationwide,” she said in a statement.

“This productivity slowdown and cost escalation have serious implications, and the QPC’s focus on investigating the drivers and researching solutions is a win for housing and the economy.”

Mercorella says the QPC could play an important role in bringing down government taxes and fees on new builds.