Perth remains the country’s most unaffordable capital for renters while regional WA saw biggest fall in affordability, a new report says.
The 11th annual National Shelter-SGS Economics and Planning Rental Affordability Index compares median rents to average incomes.
It found Perth is more unaffordable than Sydney for a second straight year with the biggest drop in affordability of any capital city, down 4% on last year’s record low.
Perth’s median rent now accounts for 32% of an average rental household income, up from 21% in 2020, and higher than Sydney and Adelaide (30%).
Rental affordability in regional WA also crashed to its lowest level in more than a decade, down 5% on last year.
In 2020, regional rents were designated ‘affordable’ at 19% of the average household income; now, they are ‘moderately unaffordable’ at 28% of income.
Shelter WA chief executive officer Kath Snell says the report’s finding “is distressing but unfortunately not surprising”.
“We have been seeing for some time the impacts of continuous rent hikes across our member organisations,” she says.
“It’s mind-boggling that Australia’s wealthiest state has the worst affordability for renters. Just a few years ago, Perth was Australia’s most affordable capital city – now it is the most expensive, overtaking Sydney.”
(The WA Government recently announced that the state now accounts for 17% of the national economy with spending on homes up 6.2% in 2025 after a 25% rise in new building completions for 2024-25).
RENTAL DISTRESS IN PERTH
Snell says the housing crisis is no longer confined to those on the lowest incomes but is “climbing the ladder” to hit working families.
“In Perth, the average renter now spends more than 30% of their income on the median rent, effectively plunging them into housing stress,” Snell says.
“The WA Government is making progress but we need ambition that matches the scale of the crisis.”
Snell says this means an extra 5000 social and affordable homes a year, a cap on rents, reining in short-stay rentals, ending no-grounds evictions and improving minimum standards.
INDEX RATINGS
The Index classified rent for single job seekers and pensioners as ‘critically unaffordable’ in Perth and regional WA and ‘extremely unaffordable’ for single parents working part-time.
For a full-time hospitality worker, Perth rents are rated ‘extremely unaffordable’ by taking up half of their income and as ‘severely unaffordable’ in regional areas (44% of incomes).
Metropolitan Perth was rated ‘moderately’ to ‘severely unaffordable’ by the Index with the coastal and central suburbs the most unaffordable just two years ago after several corridors were deemed to be of ‘acceptable’ affordability.
For regional WA, affordability ranged from ‘acceptable’ to ‘severely unaffordable’ across the state; the worst for renters is in the north (Exmouth to Broome).
SGS Economics & Planning Principal Ellen Witte says “Perth’s rental market shifted from steady to spiralling”.
“In the three years before COVID, median rents rose by just 1% a year but over the three years since, they’ve surged by around 14% a year,” she says.
“Since 2020, rents in Perth climbed by more than 90%, completely erasing the affordability gains made in previous years.
“Regional WA tells a similar story; considered ‘affordable’ in 2020, it since slipped sharply with rents now considered ‘moderately unaffordable’,” Witte says.
Robert Pradolin is founder and Executive Director of Housing All Australians and says the rental crisis is hurting the WA economy and society.
“From cafes and hotels to hospitals and childcare centres, businesses across WA are struggling to find staff because there’s nowhere affordable for them to live nearby,” he says.
“Even WA’s community services sector can’t recruit or retain staff because workers can’t afford to live in the regional communities they serve.
“Housing that people can afford is absolutely critical economic infrastructure and without it our prosperity is being held back,” Witte says.
TOMORROW’S RENTAL REPORT: it’s low but steady in Melbourne
PREVIOUSLY (PART ONE): Some slight improvement around the nation
