Rents have risen nearly three times faster than wages over the past five years, pushing rental affordability to record lows and stretching household budgets across the country, according to a new report by market researchers Cotality.
Cotality’s affordability metrics show national rents are up 43.9 percent since September 2025, compared with 17.5 percent wage growth in the same period. And rental households are dedicating an average of 33.4 percent of their pre-tax income to rent for the September quarter 2025 – a record high.
Cotality research director Tim Lawless said the divergence between rents and wages underlined just how challenging conditions had become for tenants.
“For many households, that means a lot less flexibility in the budget, and far fewer options about where and how they live,” Mr Lawless said in a statement.
“The widening gap marks a sharp reversal of the previous five-year period, when wages were generally growing faster than rents across most states and territories.
Nowhere is the pressure more evident than in Western Australia which recorded the largest rental increase, with rents soaring 66 percent during the past five years, compared with an 18.5 percent rise in wages.
The ACT is the only market where rent and wage outcomes have been broadly aligned over the five-year period, with rents up 18.5 percent, and wages up 17.8 percent.
After a brief 12 month period to September 2025, when rents appeared to be easing – rising 4.3 percent and outpacing a 3.4 percent rise in wages – rents have now increased further to 5.4 percent over the 12 months to January 2026.
“The fact that rental growth is re-accelerating is a real concern,” Mr Lawless said.
“Unless wage growth accelerates meaningfully, or we see a change in rental supply, the risk is that affordability will deteriorate further for lower income households in particular.”
