How much do Australians spend on rent?
What do Australians spend on rent?
According to the latest Domain Rental Report, asking rents in Australia have increased with average house rent costing $630 a week (or an estimated $32,760 a year) across the eight capital cities and $540 a week (or an estimated $28,080 a year) for combined regional areas.
Rent prices are at a record high as house rents in the country’s city capitals increased 5% or $30 and unit rents increased 3.3% or $20. The rent increase is true across the board not just in cities like Sydney and Melbourne. The only capital cities that did not see any changes in rental costs are Hobart and Darwin.
How much of weekly wages are spent on rent?
Ideally, you should be spending less than 30% of your income on rent. However, for many Australians, that’s simply not possible. If you’re renting a home, it may be difficult to find something suitable for your budget.
Average house rental cost by city
| City | Median House Rent | Average Weekly Salary (by state and territory) | Rent as % of weekly salary |
|---|---|---|---|
| Sydney (NSW) | $750 | $1,891.40 | 39.65% |
| Melbourne (Vic) | $570 | $1,858.10 | 30.67% |
| Brisbane (Qld) | $620 | $1,844.70 | 33.60% |
| Adelaide (SA) | $590 | $1,735.40 | 33.99% |
| Perth (WA) | $650 | $2,107.70 | 30.83% |
| Canberra (ACT) | $685 | $2,087.60 | 32.81% |
| Darwin (NT) | $650 | $1,832.80 | 35.46% |
| Hobart (Tas) | $550 | $1,670.00 | 32.93% |
| Combined | $630 | $1,888.80 | 33.35% |
Sources: Domain Rental Report March 2024 & Australian Bureau of Statistics Average Weekly Earnings November 2023
Average unit rental cost by city
| City | Median House Rent | Average Weekly Salary (by state and territory) | Rent as % of weekly salary |
|---|---|---|---|
| Sydney (NSW) | $700 | $1,891.40 | 37.00% |
| Melbourne (Vic) | $550 | $1,858.10 | 29.60% |
| Brisbane (Qld) | $590 | $1,844.70 | 31.98% |
| Adelaide (SA) | $460 | $1,735.40 | 26.50% |
| Perth (WA) | $550 | $2,107.70 | 26.09% |
| Canberra (ACT) | $570 | $2,087.60 | 27.30% |
| Darwin (NT) | $550 | $1,832.80 | 30.00% |
| Hobart (Tas) | $460 | $1,670.00 | 27.54% |
| Combined | $620 | $1,888.80 | 32.82% |
Source: Domain Rental Report March 2024 & Australian Bureau of Statistics Average Weekly Earnings November 2023
If you’re paying too much in rent, consider employing the following tactics:
- Get a housemate or two: It’s a no-brainer that two or more people splitting the rent will be cheaper than paying for it yourself. If you’ve got a spare room or recently found yourself one roommate short, get someone in to help take the burden of paying rent off your back.
- Downsize: Smaller places usually charge less rent than an inner-city apartment or a big house. Also, apartments, in general, are cheaper than houses in terms of rent, so consider downsizing as a more practical option.
- Commit to a longer lease: Finding new tenants is a pain for landlords and is often costly. You could try committing to a longer-term lease in exchange for a slightly lower rent if you’re confident you like the place and don’t foresee any issues arising.
- Research similar properties: If similar properties in your area have dropped their rents lately or your rental property has fallen in quality, you can ask your landlord for a decrease in rent. They might not oblige you with your request, but it’s worth a try, and it might work if they think they’re going to lose a trusted tenant. Just don’t ask for too big of a discount.
- Rent in the middle of the year: Rentals are usually more in demand over December-January, as leases end and people scramble to find new places while landlords raise their prices accordingly. Holding off until the slower mid-year periods could help you find a better price at a quieter time in the market.
Rent vs Loan: Is buying a home better than renting?
If you want the flexibility that comes with renting, the rent prices may not impact your decision much. However, for those who want a long-term investment and to take advantage of rising property values, purchasing your own home may be the right choice.
Ultimately, it all depends on your specific financial situation and what you want out of your living arrangements.
In terms of price, renting and repayments could come out the same depending on where you live. Renting in Sydney, for example, would cost you roughly $3,000 a month. But if you took out a home loan of $500,000 with a 6.04% interest rate (principal and interest over 30 years), your repayments will be an estimated $3,010.62 a month. That’s a $10.62 difference but you’ll enjoy all the perks of homeownership with a home loan.
Of course, there are other costs associated with buying a home, such as stamp duty, not to mention the difficulties many people face saving up for a deposit. Owning your own home can be much more beneficial as those mortgage repayments are going towards paying off an asset that will become yours.
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