Key takeaways

The Australian rental market is witnessing a significant shift, with higher-income earners increasingly dominating the rental space while lower-income earners struggle to find affordable housing.

The proportion of higher-income earners in the rental market has grown substantially over the years, while the number of lower-income renters has remained relatively stable.

Deteriorating housing affordability is a major driver of this trend, with homeownership becoming increasingly out of reach for many Australians, particularly those on lower incomes.

Rental prices have surged significantly faster than household income growth, leading to higher rent-to-income ratios and making it difficult for median and lower-income households to afford rentals.

The rental market crisis requires urgent attention and innovative solutions. While temporary measures like Commonwealth Rent Assistance can help, long-term solutions should focus on increasing the supply of affordable housing, supporting first-time homebuyers, and exploring alternative strategies to alleviate rental market challenges.