When Pat – not their real name – got a rent increase from their real estate agent, they couldn’t believe it.
The Sydney home they share with three others has leaks in the roof, several broken doors, a washing machine with faulty plumbing – meaning the household has to use a laundromat – and what Pat describes as “extensive” damage to the home’s foundation.
“Earlier this year a few tiles had collapsed and it took a month to fix them,” Pat told SBS News.
“When the plumber came in he said, ‘This is extensive damage to the property and it is dangerous. I don’t like you using this bathroom and this shower because there is a danger of you just falling through.'”
“That was a little scary to hear,” they said. “But nothing has really been resolved yet. It’s quite dire.”
When Pat and their roommates were notified of a $70 per week rent increase, they decided to end the lease.
“Our response to the rent increase would have been different if the home had been cared for.”
Now they’re worried about finding a new rental home to move into. Despite all housemates working full-time, Pat says they are all still struggling to manage rent in Australia’s most expensive rental market.
“It’s not the most extreme rent increase I’ve ever seen, but right now it’s tough,” they said. “It feels quite discouraging.”
Pat said they were concerned that challenging the rent increase would backfire.
“I feel like if we say we think the rent increase is unfair because of the lack of care given to the house, I’m afraid they will kick us out or say we are difficult tenants for the next property we try to rent.”
Rent affordability is at a record low
Pat’s experience reflects a broader trend happening across the country.
Rental costs in Australia have risen more than twice as fast as wages over the past five years, pushing rental affordability to a record low.
New analysis from property research firm Cotality shows that national rents rose by 43.9 per cent in the five years to September 2025, compared to wage growth of 17.5 per cent in the same period.
As a result, rental households now spend an average of 33.4 percent of their pre-tax income on rent – the highest level ever. That compares with a decade average of 29.2 percent and a recent low of 26.2 percent in the September quarter of 2020.
Housing is generally considered affordable if tenants do not spend more than 30 percent of their income on rent.
The widening gap reflects persistently low vacancy rates, shrinking family size and a lack of new housing supply, Cotality said.
Western Australia was hardest hit
WA recorded the sharpest rental growth in the country, with rents rising 66 per cent in five years, while wages rose just 18.5 per cent.
“Nowhere is the pressure more evident than in Western Australia, where rents have risen by around two-thirds in just five years,” says Cotality research director Tim Lawless.
“Even with wages rising slightly faster than the national average, they have not come close to keeping up with housing costs in that state.”
The ACT was the only market where rent and wage growth were virtually in line, with rents rising 18.5 per cent and wages 17.8 per cent over the five years to September 2025.
“In the ACT, income growth has managed to track rental growth more closely, which has helped limit the deterioration in affordability compared to other parts of the country,” Lawless said.
A bleak prospect
Cotality’s analysis shows that rental growth has accelerated since mid-2025, with demand continuing to outpace supply.
“With vacancy rates still at record lows in many markets and new home completions below the levels needed to meet population growth, it is difficult to see rental prices falling substantially in the near term,” Lawless said.
“Unless wage growth accelerates significantly, or we see a step change in rental supply, there is a risk that affordability will deteriorate further, especially for lower-income households.”
He said measures to boost housing supply – including more new build projects, incentives for private investment and planning reforms to allow greater density in well-located areas – are crucial to easing pressure on renters.
“Closing the gap between rental and income growth will require a coordinated effort from governments, industry and investors,” he said.
“The sooner we can bring more supply to the market, the sooner tenants will see some relief.”
For Pat, that prospect offers little reassurance.
Despite having a secure full-time job and a stable income, Pat says it’s still “very difficult” to find a place to live in Sydney.
“If you’re single and trying to find a place to live, that’s a big part of your income. It’s a significant part of my paycheck every week,” they said, adding that each move has pushed them further away from the city.
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