Blog How much do Australians spend on rent

How much do Australians spend on rent

29 January 2020

Australians spend a fair bit on rent. According to the September 2019 Domain Rental Report, the median property across the eight capital cities costs more than $400 per week. In more expensive cities like Sydney, you could easily pay more than $520 a week. The table below shows a breakdown of the median rent across each capital city in Australia at the moment.

City

Median rent (averaged between units and houses)

Average weekly salary

Rent as a % of salary

Sydney

 $523

$1,728.80

30.22%

Melbourne

 $425

$1,669.80

25.45%

Brisbane

 $393

$1,632.90

24.04%

Adelaide

 $348

$1,527.00

22.76%

Perth

 $340

$1,858.10

18.30%

Hobart

 $383

$1,502.20

25.46%

Canberra

 $510

$1,832.80

27.83%

Darwin

 $435

$1,775.40

24.50%

Combined 

 $411

$1,690.88

24.28%

Source: Domain September Rental Report, ABS Weekly Earnings Report

Units actually cost less to rent on average than houses. The table above shows the median between the two, while the one below shows the difference:

City 

Unit

House 

Sydney

$520

$525

Melbourne 

$420

$430

Brisbane 

$380

$405

Adelaide

$310

$385

Perth

$310

$370

Hobart 

$395

$450

Canberra

$470

$550

Darwin

$380

$490

Combined

$453

$441

Source: Domain September Rental Report

So while some rentals might be dirt cheap, the reality is it can be very expensive for some people, with the average person spending nearly 25% - one quarter - of their income on rent each year. Someone renting a house in Sydney can pay an average of 30% or more of their pay on rent!

This figure looks even bigger when you extrapolate it to a monthly figure. That median rent figure of $411 per week, multiplied by 4.34 (the average number of weeks in a month) becomes $1,786 per month. The cheapest (Perth) and most expensive (Sydney) cities to rent in would cost a median of $1,477 and $2,272 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 to 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 in 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 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 $1,722 per month. If, for example, you took out a $400,000 home loan at a rate of 3.00% p.a. (principal and interest repayments, 30-year loan term) your monthly repayments on that loan would be $1,686 per month, less than that median rental cost.

Of course, there are other costs associated with buying a home, such as a 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. 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.