Australia has witnessed a dramatic increase in rent over the past twelve months, pushing rental affordability to its lowest point and leaving countless tenants grappling with the toll of the rental crisis.

Soaring rental prices, limited property listing (filled with horror rentals) and a booming population have combined to make this the toughest rental market in decades.

New PropTrack data revealed Sydney is the most expensive city in Australia to rent, with a house costing $1,044 a week on average – 15 per cent higher than 12 months ago. Across the combined capital cities in Australia rent has increased by 17 per cent over the past 12 months.

Meanwhile, the national vacancy rates have dropped to record low of 0.7%, highlighting the gap between limited housing supply and increasing demand.

Affordability for Australia’s lowest income renters is also at a dire level, with a household earning $67,000 annually needing to spend nearly a third of their income on rent. With many tenants struggling to find the extra cash to keep up with the growing cost-of-living, it may be some time before renters experience any relief.

How much does rent cost in Australia?

Here’s a look at how much rent has increased for Victoria, New South Wales, Queensland, South Australia and Tasmania over the last twelve months.

Average rent in Melbourne

Rent in Melbourne has experienced an average increase of $70 a week. Median rent for houses have soared most in the northwest suburb of Aberfeldie (42.86 per cent), followed by Kew East (34.86 per cent).

Suburbs in Victoria with the highest rent increases annually

• Aberfeldie, house, $750, Annual growth 42.8%
• Newborough, unit, $470, Annual growth 42.1%
• Kew East, house, $938, Annual growth 34.8%
• Aberfeldie, unit, $525, Annual growth 31.2%
• McKinnon, house, $950, Annual growth 29.2%

Average rent in Sydney

Median rent in Sydney has climbed by more than $150 per week in close to 100 city suburbs over the past year. This increase effectively meant tenants paying the new rent needed to channel at least $20 more each day into their housing cost than a year ago – or at least $7800 more a year.

Suburbs in New South Wales with the highest rent increases annually

• North Manly, house, $1,395, Annual growth 51.6%
• Miller Point, unit, $1,100, Annual growth 41%
• Haymarket, unit, $1,095, Annual growth 36.8%
• Tamarama, unit, $1,300, Annual growth 36.8%
• Bellevue Hill, house, $2,700, Annual growth 35%

Average rent in Brisbane

The median unit rent in Brisbane jumped almost 17 per cent compared to the start of last year to $560. The median Brisbane house rent is not that far ahead at $620 a week.

Across the rest of the state rent jumped by as much as 35 per cent, while just 26 suburbs out of the 860 analysed by PropTrack have become cheaper to lease.

Suburbs in Queensland with the highest rent increases

• Rosewood, unit, $380, annual growth 35.7%
• Miles, $420, house, annual growth 31.2%
• Spring Hill, $840, house, annual growth 29.2%
• Fairfield, $550, unit, annual growth 27.9%
• Beaudesert, $420, unit, annual growth 27.2%

Average rent in Adelaide

More than 90 suburbs in Adelaide recorded double-digit growth in their weekly house rent over the past year. PropTrack data shows the median weekly rent for houses rose between 10 and 30 per cent in 93 suburbs. Semaphore topped the list, with 28.02 per cent growth taking its median to $663 per week as of January.

Suburbs in South Australia with the highest rent increases

• Campbelltown, unit, $500, annual growth 29.8%
• Grange, $450, unit, annual growth 28.5%
• Murray Bridge, house, $420, annual growth 28.2%
• Semaphore, $663, house, annual growth, 28%
• Sellicks Beach, $528, house, annual growth 23.3%

Average rent in Hobart

PropTrack’s report showed that between the March quarter of 2020 and December 2023, Hobart’s median advertised rent increased by $50 per week. In regional Tasmania, the increase was $100.

Suburbs in Tasmania with the highest rent increases

• Devonport, Unit, $350, annual growth 12.9%
• Mowbray, Unit, $400, annual growth 11.8%
• Mount Stuart, Unit $420, annual growth 10.5%
• Trevallyn, Unit $380, annual growth 8.5%
• Devonport, House $410, annual growth 7.8%

How to get approved for a rental

Recent growth in rent values have averaged a 9.1 per cent a year for the past three years in Australia, showing that renting in Australia has never been more expensive. Experts believe the squeeze will continue throughout 2024, noting that rising property prices are making it even more difficult for tenants to become homeowners. With scores of tenants competing for the same rental listings, find out how to stand out from the crowd with our applying for a rental guide.

There is further evidence Australia's ongoing housing crisis is deepening.

The national vacancy rate has hit a record low of 0.7 per cent, according to Domain.

In Perth and Adelaide, it is as low as 0.3 per cent.

"It's challenging and I think 0.3 per cent (vacancy rate), that's needle in a haystack type stuff," chief of research and economics at Domain Nicola Powell said.

Domain's February Vacancy Rates Report shows it's hard going for renters right across the country.

"And we've got some of our capital cities with much more extreme conditions, versus other cities that are actually better conditions for tenants — still technically a landlords market — but a higher vacancy rate in Canberra and Darwin sitting at 1.3 per cent."

Ms Powell said record low vacancy rates are being driven by ongoing factors like rapid population growth and rising property prices, leaving more renters stuck in the rental market.

But perhaps the biggest problem is a shortage of supply, and that sluggishness has been brought into sharp focus by the latest Bureau of Statistics building approvals data.

Building approvals fell a further 1 per cent in January, after falling 10.1 per cent in December.

CoreLogic's head of research Tim Lawless said the problem is construction companies are reluctant to build because they can't turn a profit.

"The biggest one clearly is this significant surge in construction costs we've seen through the pandemic, and even though we aren't seeing construction costs rise anywhere near as quickly as they used to be ... they are rising," Mr Lawless said.

"They're not going backwards.

"And this is where some of the challenges come for the building sector, is actually having a feasible development in place that's going to deliver some level of a profit margin is notoriously difficult now."

The problem seems to be most acute in the construction of detached homes where building approvals slid 9.9 per cent in January to an 11.5-year low.

"Add to that we're still seeing very tight labour capacity restraints in the building sector," Mr Lawless said.

"Materials costs are still very high as well. So you can see where some of this pain is coming from. And it doesn't look like it's turning around at all at the moment.

"And it's hard to see it turning around any time soon to be honest," Mr Lawless said.

Housing crisis deepening

The government has made building more homes a policy priority, committing to build 1.2 million new homes over five years.

Ms Powell says speeding up the approvals process at the council level would help achieve this target.

"And I think you know that starts at the grassroots level around reducing red tape," she said.

"It's about providing shovel-ready land at affordable prices for developers to actually be able to — you know, for the sums to stack up for developers to be able to come and actually provide that level of supply."

Director of Sky Planning Melissa Neighbour said loosening "planning controls", or what's allowed to be built on any given site, at the local council level, is key to boosting the housing supply.

"And that's a reality of developing," Ms Neighbour said,

"We need to be able to have more planning approvals in the system to allow more sites to stack up. If we are turning off the tap at the very top of the funnel, which is the planning controls, then we are already at a loss."

And for those hopeful renters looking for at least something to cling onto, Domain data shows, on a national scale, the average views per rental listing continued to decrease in February.

While it may mean that Australians are sleeping rough, on the flip side, Ms Powell said others are choosing to stay at home to save up for a house of their own.

"You know it's challenging for a tenant wanting to become a first home buyer," Ms Powell said.

"You can understand why people are moving back in with mum and dad.

"So it showcases that biting of affordability constraints is certainly there.

"And people are cost-cutting to be able to have shelter or to be able to squirrel away and save to actually buy a home."

But it also means, despite the lack of supply, fewer people are inspecting properties which reduces the competition among renters for existing places.