Is Melbourne the New Affordable Rental Hub? A Look at Australia’s Shifting Market
Key takeaways
Recent years have been marked by soaring rents, limited availability, and intense competition for rental properties. There’s some relief now as rent growth begins to slow, but the market remains fundamentally transformed.
Median advertised rents across Australia have surged 48% since 2019, from $420 to $620 per week. The affordable end of the market has seen even sharper increases, with the lowest 10% of rents rising 54% (from $280 to $430 per week).
Once-affordable markets like Perth, Adelaide, and regional areas have experienced the sharpest rent increases. These areas, previously considered havens for affordable housing, are now less accessible for renters on tight budgets.
Melbourne has become a surprising leader in relative affordability, now accounting for 29% of sub-$530 rentals, compared to Perth’s steep decline in affordable options (from 14% to 3%).
Slowing rent growth and gradually improving availability offer some hope for easing pressures. However, the sheer scale of past rent increases means housing costs remain significantly higher than pre-pandemic levels.
While slowing rent growth offers a glimmer of hope, finding affordable rentals remains an elusive goal for many Australians. Long-term solutions must focus on increasing housing supply and addressing affordability disparities across regions.
Is the rental crisis finally easing, or is this just a temporary pause?
If you’ve been keeping an eye on the rental market—or trying to find a place to live—you’ll know that the past few years have been exceptionally tough for renters.
Surging rents, scarce availability, and intense competition have defined the landscape.
But now, some good news is emerging: rent growth is finally starting to slow.
While this may offer some relief, it’s worth taking a step back to understand just how much the rental market has transformed over the past five years.
Spoiler alert: renting has become far more challenging, especially at the affordable end of the market.
Rents have skyrocketed – and the affordable end took the biggest hit
Since the end of 2019, median advertised rents across Australia have jumped an eye-watering 48%, according to PropTrack.
That’s right, what was a typical $420 weekly rent has now ballooned to $620.
But here’s what’s even more staggering: rent increases have been sharper at the lower end of the market.
Consider this: the 10th percentile of rents (the cheapest 10% of properties) has leapt from $280 per week in 2019 to $430 per week today.
That’s a massive 54% increase.
For renters relying on affordable housing options, this has been nothing short of devastating.
Why has this happened?
Angus Moore, Executive Manager of Economics at PropTrack explained:
“Geography plays a significant role.
The most affordable rental markets in 2019, such as Perth, Adelaide, and regional areas, have seen far sharper rent increases compared to historically pricier markets like Sydney and Melbourne.”
The shifting landscape of affordable rentals
Five years ago, the picture of affordable rentals was quite different.
According to PropTrack, back in 2019, 30% of homes across Australia were rented for less than $360 per week.
Most of these were in regional areas (43%) or more affordable capital cities like Perth (14%).
Sydney and Melbourne combined accounted for just 22%, which made sense given their higher overall rental prices.
Fast forward to today, and the definition of “affordable” has shifted dramatically.
That $360-per-week threshold is now closer to $530 per week.
And the locations of these affordable rentals have changed just as drastically.
Mr Moore said:
“Melbourne, for example, has become the dominant source of what remains of the country’s affordable rentals.
Today, 29% of Australia’s sub-$530 rentals are in Melbourne, more than its share of the overall rental market.
Meanwhile, Perth, once a haven for cheaper rents, now accounts for just 3% of these affordable options, a stark decline from its 14% share in 2019.”
What does this mean for renters?
The story here is one of shifting pressures.
Regional areas and once-affordable cities like Perth and Adelaide have seen rents skyrocket, making them less accessible to renters on tighter budgets.
Meanwhile, Melbourne has emerged as a relative “affordability” leader, not because rents are cheap, but because they haven’t climbed as sharply as elsewhere.
For renters, the current state of the market offers a mixed bag.
On one hand, rental growth is slowing, and availability is gradually improving, which could help ease conditions in the months ahead.
On the other hand, the sheer scale of rent increases over the past five years means that housing costs remain significantly higher than they were pre-pandemic.
Looking ahead
While it’s clear the rental market remains challenging, the slowing pace of rent growth and improving availability offer a glimmer of hope.
For renters, this could signal the start of a long-overdue rebalancing in the market.
But make no mistake, the landscape has fundamentally shifted.
For many Australians, the dream of finding an affordable rental feels more elusive than ever.
As we move forward, addressing the structural issues underpinning this crisis, such as the chronic undersupply of housing will be critical.
Until then, renters will need to navigate a market that has changed beyond recognition, with a cautious eye on what’s to come.
