Rent affordability is at the worst level on record for low-income families with the net worth

The average income household can afford just 37% of market rents, new research has revealed, as affordability hits an all-time low.

The dire state of Australia’s rental market was highlighted in the latest realestate.com.au rentability report, which found rental prices rose 5% in the December 2025 quarter to be 55% higher than in early 2020.

After years of strong rental growth, the national median rent reached $650 by the end of 2025, up from $420 before the pandemic.

REA Group chief economist and report author, Angus Moore, said Australian employers have been facing tough conditions since at least 2008, when records began.

“A middle income household in Australia can rent just 37% of the rental properties advertised on realestate.com.au between July and December 2025,” Mr Moore said.

“Since the start of the pandemic, national tax rates have increased by 55%, and income growth has failed to keep pace, increasing by 25% during the same period.

In addition, Mr Moore said that rents have increased rapidly in affordable areas.

“Thankfully, there are signs that conditions are improving for employers. Employment availability improved in 2025 for most companies, and rent growth, while still strong, has slowed from the peaks seen in 2022 and 2023.”

“However, the ability to hire will remain at a very low level next year.”

South Australia is one of the most affordable states for renters, second only to New South Wales. Image: Getty

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Among low-income households earning just under $75,000 a year, the report showed that just 2% of rentals were affordable in recent months.

Households in New South Wales and South Australia are facing the worst rental crisis in the country, although Mr Moore noted that other states were less affordable.

It is ranked from least affordable to most affordable. Source: realestate.com.au Employment Affordability Report

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Victoria was the only state to see rentability improve over the past 12 months, holding its place as the most affordable place for renters by a wide margin, he said.

Older Australians are particularly vulnerable to a tight rental market

For 85-year-old Maddie Long, owning a home is not an option, but she considers herself one of the lucky ones, having rented the same two-bedroom flat in Adelaide’s Kings Park for more than three decades.

In 1970, Ms Long and her then husband bought a house together in Adelaide after years of renting. But when the marriage ended in 1979, while studying social work part-time and raising children, her living life changed.

Ms Long lived in the family home, paying off part of the mortgage, until her youngest son turned 18. When the house was finally sold, she received half of what was left, ‘Parental Support Benefit’ and rent assistance. Curious to know if he could still own a home, he went to the bank.

“The bank manager said there would be no way in a million years that they would give me a loan because I was not working full time,” he said.

After leaving home, he first rented a property by the beach, before moving to an area near the city where he still lives today. A few years after it moved in, it was sold. He says, he might have bought it then – but leaving himself with nothing to fall back on.

“I don’t like living without a barrier,” she said. “I don’t need to have things, but I need a place to live, and I need to feel safe there.”

Nowhere is this more evident than in his relationship with his employer. Over time, the arrangement has become more rare than regular renting. There is no managing agent among them. They face each other directly. He says he once said to him: “When you live here, it’s yours.”

That is important. So is the rent. Maddie still pays $260 a week. According to realestate.com.au’s latest Market Insight report, the median unit price in Adelaide reached $550 in the December quarter, and $630 for houses.

Rental prices across the country. Source: realestate.com.au Market Insight

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In a rental market where affordability is tight and competition is fierce, that kind of trust and kindness can be invaluable. – even if arrangements like Maddie’s are becoming increasingly rare.

“Personal relationships are a big part of security,” he said. “We respect each other.”

His story is against a broad and flawless background. An analysis by the Grattan Institute found that 67% of retired families who rent privately live in poverty after housing costs, rising to 78% for single women.

Older women who are separated or divorced are also three times more likely to be employed at age 65 than married women.

Ms. Long’s back porch. Image: Provided

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Ms Long said she cannot enter the rental market now:

“If I was paying $400 a week, I wouldn’t have enough money to drive a car or do anything else.”

I realize that I was being cared for. I have always had a place to live.”