Abstract

This paper considers rent cost trends in Australia over the last 40 years by comparing the growth in rents and incomes for Australian households. The paper combines income and housing survey results from the Australian Bureau of Statistics (ABS) with modelled estimates for the years beyond 2020 using microsimulation methods. While it is true that in the last 3 years rents have grown a little more strongly than incomes over the medium and longer term rent costs have largely kept pace with incomes. The paper compares and contrasts the frequently used advertised rents with actual rents from the ABS Consumer Price Index Series finding that advertised rents generally increase more sharply than CPI rents but at least for now and the very near term it would appear that the large step up in growth in advertised rents is not fully filtering through to all rents. The paper also estimates financial stress estimates using the HILDA survey and finds that renters experienced higher rates of stress 20 years ago relative to today, however there has been some small Increase in the latest wave in 2023. Housing stress is estimated to be a more substantial Issue in the outer suburbs of capital cities and regional areas of Australia than inner city areas.

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