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The Australian residential property market is the section of the Australian property market that provides rental properties by landlords to tenants. In Australia 31% of households rent their residences.[1] The vast majority rent from private landlords, and a small minority rent from public housing authorities. Over the last three decades the proportion of Australians in public housing has halved, whilst the amount renting privately has grown.[1][2] The average weekly price for a rental in Australia is $570 AUD.[3] Sydney has the most expensive capital city rents.[4] Rental rates have increased faster than inflation in recent years.[3][5]
In recent years, the cost of Australian rentals has become a prominent political issue; dubbed the 'rental crisis'. Demand remains high while supply is low.[4] Some have advocated supply-side reforms to address the crisis, such as reforms to construction approvals,[6] others for price controls,[7] and others for demand-side reforms like immigration restrictions. The actions of Australia's major parties on the issue have been widely criticised as inadequate,[8] though praised by some.[9]
Around one third of Australia's 9.8 million households pay rent for their residences. The other two thirds are owner-occupiers, half of whom have a mortgage.[1][2][Note 1] Of the households that rent, ~83% rent from private landlords, while less than 10% rent from public housing authorities.[2][Note 2] The proportion of households from a public housing authority has approximately halved since 1995, while the proportion renting from a private landlord has increased by over ~40%.[2]
Immigrants overwhelmingly settle in Sydney and Melbourne, exacerbating the shortage of supply in those cities.[10]
Rental prices
The average weekly price for a rental in Australia is $570 per week. Units are typically cheaper, at a national median of $540 vis-a-vis houses at $582.[3] Rental prices grew nationally by 10.1% between 2022 and 2023; substantially higher than the annualised CPI rate of 7% for the period.[3][5] Vacancy rates are historically quite low, at around 1%; a rate some argue is indicative of upward price pressure.[11]
Median rents across Australian cities as of Q1 2023 is as follows:[3]
Rental availability and affordability has become a prominent issue in Australian Politics recently, with the topic being the subject of substantial media coverage and political debate.[12][13][14][15] Media reports have included coverage of low income households being unable to find suitable accommodation and forced into homelessness.[16][17] Some suburbs in Australia saw rent increase between 30-40% from 2020 to 2022;[17] with Bellingen on the NSW coast experiencing an annual rent increase of 48%.[18] In September 2023, the national vacancy rate declined to 1.1%.[19]
Reasons provided for the crisis vary, with some blaming failures in residential construction processes at the council level,[20] a lack of public housing construction,[21] vacant residences,[22] increases in short-stay accommodation[23] or demand factors like immigration.[12] Reductions in average household size during the Covid-19 pandemic have also been pointed for driving a demand squeeze. The pandemic has prompted a desire for more space and to live with fewer people.[24]
Solutions proposed to address Australia's rental crisis also vary. Some economists have proposed reforms to residential construction approval process,[6] while others (most notably the Australian Greens) have proposed an introduction of rent controls.[7] Major parties proposals at a national level to address the issue have included a scheme proposed by the ALP called the 'social housing fund',[25] whilst The Coalition has promoted assistance schemes to increase rates of home-ownership. The responses of Australia's major parties have been criticised as inadequate.[26][8][27]
- The most recent housing statistics available are from the 2021 ABS census, a survey conducted every five years.
- The remainder rent from landlords that are neither private landlords, nor state or territory housing authorities; such as Commonwealth housing authorities like Defence housing
- Gross yields are calculated by dividing the annual weekly rent of a property by its purchase price. (i.e. [annual rent] / [property price] = [gross yield]). Net yields, which take into account aggregate financing, maintenance, tax, or other costs, are usually much lower
- Vacancy rates are calculated by dividing the number of properties vacant for any reason by the total number of properties. Reasons for vacancy may include: disrepair, vacancy prior to sale or construction, renovations, etcetera
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