Western Australia and Queensland now lead the nation when it comes to rental hardship, according to the latest Rental Pain Index.
The index, from Suburbtrends, revealed that Western Australia now exhibits the highest level of rental stress with a 12-month rental increase of 16 per cent making it increasingly unaffordable to rent in the state.
Renters now have to spend 30.32 per cent of their income on rent and the average vacancy rate is just 1.13 per cent in WA.
The severe conditions have resulted in the highest Rental Pain Index (RPI) score of 84.29 across the states.
Queensland follows with a RPI score of 82.63.
The Sunshine State has recorded a 12-month rental increase of 10.02 per cent and renters now have to spend 31.87 per cent of their wages on rent.
The vacancy rate sits at 1.25 per cent.
Suburbtrends founder Kent Lardner said he was deeply concerned about the results.
“The March 2024 report shows an alarming trend where rental stress not only persists but worsens,” he said.
“Western Australia and Queensland now lead the nation in rental hardship, with the majority of their suburbs facing unprecedented levels of stress.
“This is not just a market fluctuation; it’s a clear signal of a deepening crisis that requires immediate attention.”
In contrast, NSW and Victoria, while experiencing substantial rental price increases of 10.80 per cent and 12.42 per cent, respectively, have RPIs marginally below WA and Queensland.
NSW has an RPI of 79.27, while Victoria sits at 79.21.
Despite this, NSW stands out for its particularly high rental affordability strain, with 32.86 per cent of income needed for rent, marking it as one of the most financially burdensome states for renters.
The RPI now also identifies the suburb areas with the highest level of rental pain, with Raymond Terrace, in NSW, topping that list with an RPI of 100.
In fact, each of the top 25 suburbs recorded a RPI of 100 with suburbs such as Hamilton Hill in WA and Emu Park in Queensland also on that list.
“These communities are at the breaking point,” Mr Lardner said.
“With rental affordability consuming upwards of 30 per cent of household incomes and vacancy rates at critically low levels, the situation for many Australian renters is becoming untenable.”
On the other end of the spectrum, the Australian Capital Territory (ACT) and the Northern Territory (NT) present a somewhat less dire picture, with the ACT even seeing a slight decrease in rental prices (down 0.96 per cent).
However, their RPIs of 47.64 for the ACT and 59.06 for the NT still indicate significant room for improvement in rental affordability.
Mr Lardner said the index results showed urgent policy innovation was needed.
“The current data compels us to rethink our approach to housing,” he said.
“Considering the success of mobile home villages in providing affordable housing solutions internationally, it’s crucial for Australia to explore similar alternatives.
“Prefabrication technology could be a gamechanger, offering quicker, more affordable housing options to combat the rental crisis.
“Now, more than ever, innovative and bold policy solutions are needed to address this widespread rental stress.”
