How much should you spend on rent?
Here's how much of the average wage you need to spend on rent in each Australian capital city.
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How much money do Australians spend on rent? We've looked at average rents in major Australian cities, combined with average weekly salaries to work out what people spend on rent. Turns out, the average Australian living in a capital city spends between 20% and 30% of their weekly income on rent.
Check out each city in the table below, broken down by rents for units and houses. Or skip ahead for advice on minimising your rent expenses.
How much do Australians spend on rent?
|City||Median rent||Property type||Average weekly salary||Rent as percentage of salary|
Sources: Domain Rental Report, ABS Average Weekly Earnings Report
Methodology and data
To create this analysis we looked at the average weekly rents for houses and units in each Australian capital city and then broke them down as a percentage of the average weekly salary.
How much rent can I afford?
You need to do your own budget based on your income, lifestyle and expenses. Even with the average figures listed above, there is a lot of variation in cities depending on housing type and location.
As a general rule, minimising your rental costs is probably one of the biggest ways you can save money. If you're spending more than 30% of your income then you're definitely above the Australian average.
Based on the data above, if you wanted to save on rent you could:
- Rent a unit. Units rent for less than houses on average, although in Sydney there's little difference between the average rental prices.
- Go regional. While there's a lot of variation between regional areas of Australia, if you can get out of the big cities you will undoubtedly find cheaper places to rent.
- Get out of Sydney and Canberra. These two cities require the highest percentage of your weekly wage to cover rent. Hobart's also getting very expensive.
But you don't need to move states or cities to save on rent. You could also consider downsizing to a cheaper place, living in a share house or moving in with family members. Of course, these aren't options for everyone, but they could be for you.
If you're looking to rent a place and you feel that landlord is asking too much you could try negotiating a lower price. This can work if the property has been untenanted for a long time and is not a competitive property.
Lastly, you could also consider buying a property instead of renting. As impossible as it might sound, mortgage repayments might not be that much higher than what you're paying in rent. Use a loan repayment calculator and see for yourself.
Another option is rentvesting. This involves buying an investment property in a more affordable suburb and renting it out. Meanwhile, you continue renting in an area you enjoy living in. While not perfect, this strategy lets you build property wealth by buying in a cheaper area while living where you want to live.
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