How much do Australians spend on rent
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
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