Regions facing record high levels of income required to meet rental payments

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on May 12, 2022 Fact Checked
Regions facing record high levels of income required to meet rental payments

Regional renters are feeling the pinch as the portion of income required to service rent hit a record high last quarter according to new research.

Driven by stronger rental demand and lower supply, rent values have continued to increase sharply across Australia.

But those living regionally or in smaller capital cities are copping the brunt of the rental affordability crisis according to the latest ANZ-CoreLogic Housing Affordability Report.

The portion of income required to pay rent in Hobart and Adelaide hit record highs in the March quarter, with renters needing to fork out 34.4% and 31.6% of their income respectively.

Regional renters saw affordability deteriorate more sharply when compared to combined capital city renters, as the household income required to meet rental payments hit a record high of 34% over the past quarter.

This is compared to average capital city renters who require 28% of their income.

The portion of household income required to meet rental payments now sits at 30.6% on a national level. 

According to the report, rental serviceability has deteriorated most rapidly across the Richmond - Tweed market including Byron Bay.

Specifically, the portion of income required to pay median rents is now 53% in Byron Bay. 

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Housing values 8.5 times higher than household income

The national median dwelling value is now an estimated 8.5 times higher than the median annual household income - a new record high.

This can be compared to pre-pandemic levels when housing values were 6.8 times the average household income.

From March 2020 to March 2022, the value to household income ratio regionally also increased form 5.9 to 7.9 - faster than the increase in capital cities.

This is while median weekly income in capital cities are around 32.6% higher than regional Australians' incomes. 

The capacity to pay and compete for regional housing on a capital city dwellers' income likely contributed to the rising housing costs in regional Australia according to the report.

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Saving for a deposit now takes 11.4 years

Years needed to save up 20% for a deposit reached a record high of 11.4 years, assuming a household saves 15% of its income per annum.

Sydney home buyers would need to save the longest - years required to save a 20% deposit reached a record high of 14.1.

Based on the current median dwelling value in Australia - which is $738,975 - first home buyers would need to save $147,795 according to ANZ and CoreLogic.

The portion of household income required to service new mortgage repayments now sits at 41.4% nationally.

This is above the decade average of 36.5% but is below the record high experienced in March 2008.


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The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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Rachel is a Finance Journalist, and joined Savings in 2021. Coming from a background in the FinTech space, her interests include the innovation of lending technology, property, investing, and more. With a passion for educating and informing people about their finances, she hopes to increase the financial literacy of everyday Australians.

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