Rental affordability has worsened in the past 12 months, according to a new analysis of what tenants are now paying.

The PropTrack Rental Affordability Index shows that tenants are paying the highest rents in New South Wales, while Victoria is now the most affordable state for renters. There is a glimmer of hope for renters, though, with the report saying rental market conditions are now showing signs of easing, with more properties available for rent in most capital cities.

The pace of rental growth was slower in 2024 than it was in 2023, and PropTrack senior economist Paul Ryan predicts it will continue to slow in 2025. The report shows that in 2024, growth in rents outstripped income growth. It says a household earning the median income in Australia of $116,000 can afford just 36% of rentals advertised between July and December 2024.

Households on a higher median income of $177,000 a year (which represents the earnings of the top 30% of Australians) can afford 83% of advertised rentals.