What do Australians spend on rent?
Australians spend a fair bit on rent. According to the March 2023 Domain Rental Report, the median property across the eight capital cities costs more than $400 per week.
In more expensive cities like Sydney, rent can easily exceed $640 a week. The table below shows a breakdown of the median rent across each capital city in Australia at the moment.
Average Australian rent by city
| City | Median rent (averaged between units and houses) | Average weekly salary (by state and territory) | Rent as a % of weekly salary |
|---|---|---|---|
| Sydney | $640 | $1,810.20 | 35.36% |
| Melbourne | $490 | $1,793.90 | 27.31% |
| Brisbane | $530 | $1,760.70 | 30.10% |
| Adelaide | $470 | $1,658.00 | 28.35% |
| Perth | $500 | $1,988.50 | 25.14% |
| Hobart | $515 | $1,586.40 | 32.46% |
| Canberra | $620 | $2,019.10 | 30.71% |
| Darwin | $585 | $1,744.10 | 33.54% |
| Combined | $557.5 | $1,807.70 | 30.84% |
Average unit rental costs by city
Units actually cost less to rent on average than houses. The table above shows the median between the two categories, while the one below shows the difference:
| City | Unit | House |
|---|---|---|
| Sydney | $620 | $660 |
| Melbourne | $480 | $500 |
| Brisbane | $500 | $560 |
| Adelaide | $420 | $520 |
| Perth | $450 | $550 |
| Hobart | $470 | $550 |
| Canberra | $550 | $690 |
| Darwin | $520 | $650 |
| Combined | $550 | $565 |
Source: Domain March Rental Report
So, while some rentals appear to be quite reasonably priced, the reality is they can be very expensive for the majority of Aussies, with the average person spending over 30% of their income on rent each year. Someone renting a house in Sydney could spend an average of 35.36% or more of their income on rent!
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This figure looks even bigger when you extrapolate it to a monthly figure. That median rent figure of $557.5 per week, multiplied by 4.34 (the average number of weeks in a month) becomes $2,419.55 per month. The cheapest (Adelaide) and most expensive (Sydney) cities to rent in would cost a median of $2,039.8 and $2,777.6 respectively.
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 or less flashy places will 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 fairly costly. You could try committing to a longer-term lease (like 24 months) in exchange for slightly lower rent, as long as 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.
Of course, you could actually pay less in rent by buying a home and taking out a good value home loan to pay for it…
Get a real good home loan instead
Renting instead of owning a home does have some benefits, of course, but if you can afford to do so, it’s definitely worth considering buying a home instead of continuing to rent.
First of all, renting isn’t always cheaper, despite what you might have heard. The median monthly rent as discussed above is more than $2,419.55 per month.
If, for example, you took out a $400,000 home loan at a rate of 5.35% p.a. (principal and interest repayments, 30-year loan term) your monthly repayments on that loan would be $2,233.65 per month, less than that median rental cost.
Of course, there are other costs associated with buying a home, such as stamp duty, not to mention the difficulties many people face actually saving up for a deposit. But once you’ve got a foot in the proverbial door, owning your own home can be much more beneficial, as those mortgage repayments are going towards paying off an asset that will one day become 100% yours, one you could either sell for profit or keep for future generations.
It’s important to find a good value home loan to make buying over renting worthwhile.
Related: Buying vs Renting
You should ideally look for a home loan with a low-interest rate, low fees and a good range of product features with easy online access and support.
loans.com.au has such options available - check out our range of home loans to see which home loan is the right one for you.
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As an expert in real estate economics and housing trends, I bring a wealth of knowledge to the table, supported by a deep understanding of the factors influencing the Australian rental market. I am well-versed in interpreting data from reliable sources, such as the March 2023 Domain Rental Report, to provide insightful analyses and guidance.
In the provided article, the focus is on Australians' spending patterns on rent, with detailed information on the average rental costs across major cities. Let's break down the key concepts discussed:
-
Average Australian Rent by City:
- The article presents median rental figures for houses and units in eight capital cities, including Sydney, Melbourne, Brisbane, Adelaide, Perth, Hobart, Canberra, and Darwin.
- Sydney stands out as the most expensive city, with a median rent of $640 per week.
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Rent as a Percentage of Weekly Salary:
- The data includes the percentage of the average weekly salary allocated to rent in each city. For example, in Sydney, rent constitutes 35.36% of the average weekly salary.
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Average Unit Rental Costs by City:
- The article highlights that, on average, units cost less to rent than houses across the cities.
- A breakdown is provided for both unit and house median rents in each city.
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Monthly Rent Extrapolation:
- The article extrapolates the weekly median rent figure to a monthly amount by multiplying it by 4.34, the average number of weeks in a month.
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Tips for Reducing Rent Burden:
- Practical suggestions are offered to individuals facing high rent costs, such as getting housemates, downsizing, committing to longer leases, and researching similar properties for potential rent reductions.
- The article advises on timing, suggesting that mid-year periods might be more favorable for finding lower rental prices.
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Consideration of Homeownership:
- The article explores the idea that, despite the benefits of renting, buying a home might be financially advantageous.
- A comparison is made between median monthly rent and monthly repayments on a hypothetical home loan.
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Importance of a Good Value Home Loan:
- The article emphasizes the importance of securing a home loan with favorable terms, including a low-interest rate, low fees, and convenient features.
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Reference to loans.com.au:
- The article mentions loans.com.au as a provider with options for low-interest rate home loans, encouraging readers to explore their range of products.
In conclusion, this comprehensive overview of the Australian rental market not only provides data-driven insights into current rent trends but also offers practical advice for individuals seeking to manage their housing costs effectively.
