How much of our wages do we spend on rent in Australia?
Sydneysiders are committing close to 40% of their earnings to renting.
If you want to cut down on your rental expenses and start saving for a home, move out of a capital city as fast as you can.
In Sydney, the average rent is a whopping 37.9% of average weekly earnings for NSW. Move into regional NSW and that percentage drops to a rather more manageable 22.4%.
How much should I spend on rent?
While there's no definite rule on how much to spend on rent, spending more than 30% of your income on rent indicates housing stress.
That pattern is repeated across Australia. In Melbourne, the average rent consumes 30.7% of available earnings, which drops to 19.9% in regional Victoria. In Brisbane, the figure is 28.4%, while in regional Queensland it's 23.1%. In Adelaide, 26% of average earnings go on rent, while regional SA sees the figure drop to 19% -- the lowest in the country. In Perth, the figure is 25.6%, while in the rest of Western Australia the percentage drops to 20.7%. And while Hobart residents cough up 25.6% of their average income for the typical rent, that figure falls to 19.9% outside the capital.
finder.com.au calculated those percentages for six states and their capital cities, using data from the Australian Bureau of Statistics and Core Logic. (Figures weren't available for the ACT or Northern Territory.)
Here's the full set of numbers for capital cities:
|City||Average weekly earnings||Weekly rent||Percentage|
And here's what you'll pay in regional areas:
|State||Average weekly earnings||Weekly rent||Percentage|
|New South Wales||$1,562.30||$350||22.4%|
Having to spend 30% or more of your wages on rent can make it almost impossible to save for a mortgage, and is often defined as creating "housing stress". While many people can't realistically relocate and keep their job, moving to a less "fashionable" area can reduce your rent and make that goal more realistic. If you're struggling to even pay your rent, it's definitely time to review your budget and work out areas where you can save.
The number of Australians renting is on the rise. Research by the ABS shows that in 2013-2014 25.7% of households were renting, up from 18% in 1994-1995.