Aussie Rent Is Increasing Twice As Fast As Wages

The Australian Bureau of Statistics has released its 2011 report on home rental costs in Australia and the news isn't pretty. The latest figures reveal a sharp increase in weekly household rent across the country, with median rental costs increasing twice as much as wages between 2006 and 2011. Here's a look at the Australian states and regions that have been hit the worst.

Sydney picture from Shutterstock

According to the ABS' most recent Rental Rates report, the median weekly household rent rose from $191 in 2006 to $285 in 2011; an increase of nearly 50 per cent. Meanwhile, the median weekly household income increased from $1027 to $1234 over the same period; an increase of just 20.2%.

Here's a look at how median rental payments increased between 2006-2011 across each State and Territory:

State 2006 median 2011 median Dollar change Percentage change
New South Wales 210 300 90 42.9
Victoria 185 277 92 49.7
Queensland 200 300 100 50
South Australia 150 220 70 46.7
Western Australia 170 300 130 76.5
Tasmania 135 200 65 48.1
Northern Territory 140 225 85 60.7
Australian Capital Territory 260 380 120 46.2
Australia(b) 191 285 94 49.2

As you can see, Western Australia reported the biggest increase of median weekly rent with a rise of 76.5 per cent. The ACT had the highest median weekly rental payment in 2011 of $380. All states and territories reported a rent increase of over 40 per cent between 2006 and 2001 — an increase that consistently outpaced income.

In terms of local government areas, the highest median weekly rent payments were mostly located in the Greater Sydney region, including Manly, Pittwater, Leichhardt, Waverley, North Sydney and Mosman. Ku-ring-gai topped the list with a median rent payment of $575 per week.

The fastest growth in median rent payments was recorded in the township of Weipa in far north Queensland, which jumped a whopping 569.4 per cent between 2006 and 2011. However, its starting rate was just $36 per week which makes the increase slightly more justifiable.

Rental Rates in Local Government Areas, 2011 [ABS]


Comments

    And so I would imagine this has only continued to get worse in 3 years prior to the study ?

      Definitely for WA, 300 is cheap for a rental now.

        300 is nothing since every single person in WA in a miner with 100K+ salaries.

          That's just the problem, miners are only a few percent of the whole WA workforce but their buying power drives up prices disproportionately.

            and they're certainly not all on $100k+, they just have much lower outgoing expenses

              Hahaha yep, I wish I was getting even close to $100k!

    The thing that surprised me the most about this is that Tasmania was included; I'm so used to being ignored down here..

    No doubt due to rising house prices. It's at its upper limit, not much room to move now.

      And owners who decide that they have to fund *long* overdue repairs to their properties with immediate ridiculous price-hikes. I must have been alone in not raising rent on my house for years because I couldn't justify it while the agent did such a shoddy job organising repairs.

    But where are the cheapest rents!?

    Landlords are feudal parasites
    http://www.natalt.org/2013/11/22/property-investors-as-modern-day-parasites/

    Everyone is working harder than ever, and somehow nobody has any money to spend, and the situation is the same in practically every western country
    Australia's problems are only beginning now that we're exporting less to China

    What bargaining power or choices do we landless peasants have?
    https://www.youtube.com/watch?v=7HZANYxnkWk

    A mass rental strike?
    Build more housing?
    Wait for low cost 3d printed houses? I can't wait to live in a 2m square concrete room...
    Building floating cities?
    Wealth redistribution? It's never worked and always makes things worse
    Flee to another country? Where they're having the same problems or worse?
    Colonising the moon would be nice, if we had the economic freedom to pursue it without a hundred leeches drinking all your savings through a straw, we'd probably be on the moon already using dogecoin to buy space milk or something

    Things seemed so easy a few hundred years ago, all you had to do was sail somewhere and put a flag in the ground

    Get ready for the tax rises, savings and super raids to keep this broken economic system going
    I do not want to be in any city when this global system and illusion breaks, it's going to be ugly

      Actually, the rent paid on any investment property is usually a fair bit less than the interest payable on purchase, even now with interest rates at historical lows. Negative gearing makes some sense - but the depreciation allowances that make negative gearing worthwhile are a bit silly. Note that on sale of a property, the owner must pay capital gains tax, and the capital gain factors in any "reduction" in value due to depreciation. CGT is only billed at half the marginal rate, however.

      The main reason negative gear is retained is fairly simple. If it were eliminated, property values would drop enormously and quite a few people would be forced into bankruptcy.

      You might say that's fair enough, but the people affected aren't just investors but *everybody* who owns property.

      Consider the effects on the banking system if a third of all mortgages were to default because the mortgaged property was suddenly worth less than the loan.

        Negative gearing has no useful benefit. It has been proven many times over. It is time that existing arrangements are grandfathered with an expiration date of ~10 years. Time for the leeches to be removed from the system and fuel the money back into the economy.

        Oh no! bankruptcy! Not that!
        Will all the bricks in the house disappear too?

        We're chasing illusions and destroying everything in the process
        By propping up illusions by essentially saying they're too big to fail, you build up a bigger fall

        At some point illusions will meet hard reality, and it seems that day is fast approaching
        Only when the fiction we live by is thrown out, is there a chance of a fresh start

        Phase it out then. Leave negative gearing in place for 5-10 years, with no new applicants. Those who bought rentals based on being able to negatively gear them get a slice of the pie. Sure prices will drop, but most likely so will the number of houses for sale. Those who are living in their house will keep them, those renting them out already will keep them.

        Hell partially keep it. New constructions only, and only until 10 years old.

        Last edited 08/04/14 9:15 pm

      Welcome to the rent seeker economy. It will backfire.

      Awww we landlords are not all that bad :-) I recently moved to the UK for 12 months and rented out my house. Switched my mortgage repayments to interest only and I'm still subsidising it (reasonably substantially) with savings. We're not all parasites. Still, there's no denying it's a seller's market.

        Thats nice of you - but isn't this your 'home' rather than an investment property?
        Different circumstances in my books.

        A friend owns 2 flats opposite each other (mirrored floor-plans), she manages one, a real estate agent manages the other.
        She hasn't raised the rent in 5 years but the real estate agent has on the other flat for no reason other than his percentage. The difference is now over 22% and she cannot justify it.

      I dunno, how about work hard, save your money, and buy into the rental property market yourself? There's also plenty of places to live in the world where rental prices are more reasonable.

      I'm sure you'll come up with all the excuses in the world, but you know what? I'm a 31 year old uni student who's gone back to uni for an occupation change for something more profitable. Sure, it's hard now but I'm not bloody whinging. I'm working damn hard to get on top. Yeah, there are some unfair circumstances caused by other people but I've never gained from doing nothing more than complaining. So instead of doing that, I'm doing what it takes to get where I want to be. So in a few years time you'll be welcome to rent out one of my properties, and I'll be the "parasite" living off your money, while you complain. No skin off my nose as I won't have to listen :)

      EDIT: Also, lol @ things being easier a couple of hundred years ago.

      Last edited 09/04/14 2:27 pm

        Save your imaginary money backed by nothing so it can be inflated away by banksters or extracted through force to waste on stuff you're not allowed to vote on by gov, meanwhile the gov does nothing to improve economic conditions, their main priority is renovating the lodge and making sure australia cannot compete globally in any capacity, besides maybe farming.

        A slave that doesn't complain is a good slave, but he's still a slave,
        Back to the fields! Who's that old hag on our money? You work, they eat
        The system has not changed, slavery was not abolished, it's just not in your face anymore
        It doesn't matter who you vote for, it cannot get fixed through politics.

        Least they could do is let me sleep at the lodge for one night in my life to make up for it, but I wouldn't mind flying one of those new eighty six F-35s we bought either, hopefully the batch of f-35s we get aren't plagued with the problems they're finding in the american ones.

        I have trouble believing you will have enough to buy a property outright in a few years until property prices undergo massive correction. In a few years, we're more likely to be both fighting over a half eaten sandwich thanks to the economic situation we are entering, that or war.
        We are in the final days of rome, but this time there's 7 billion on the planet all depending on a fragile system and there's nowhere to run, prepare accordingly!

        Also a few more advantages of living hundreds of years ago, things weren't anywhere near as frantic, you had time to think, every book written at the time was insightful, products were made to last, the earth, air and water weren't toxic, and there was no flappy bird or justin beiber!

          Extrapolating on the propositions in this argument, in 20 years' time, I will have money, and you will still be complaining.

          The difference between you and I is that I wrap my lunch in foil, and you wear it on your head.

          Last edited 10/04/14 10:16 pm

            Perhaps you like being fleeced your entire life, I do not
            I'd rather spend 20 years changing the system than be stuck 20 years under a broken system
            No problem gets fixed if it is left ignored
            Enjoy your bondage and keep chasing that carrot

              Don't have to change it if I'm benefitting from it :) Get as angry as you like son, you can't change anything by doing what you're doing.

    I'm glad our government is worried about this trend and taking active steps to fix the situation. Oh wait, no, that's not right, that's exactly what they're *not* doing.

    Why are rents always shown in weekly values?
    No-one pays rent weekly and most of us aren't paid weekly.

    As a renter - it's always frustrating that the Per Calendar Month rent isn't used when advertising properties.
    It's always more than the advertised weekly rent due to 52 weeks not = 12 months of 28days.
    I suspect this is so people 'think' they can afford $250 a week then find out its more like $285 a week but end up signing on due to being so far down the track of signing a lease and the process being so unsatisfying and time-consuming.

    /rant over

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