Here Are The Least Affordable Places To Rent In Australia

And the winner is... Hobart!!

Rent, hey. It can be pretty annoying transferring that chunk of money out of your account week after week.

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How unaffordable your rent is partly depends on where in Australia you live.

A report released today maps how unaffordable rents in different parts of Australia are.

The Rental Affordability Index (RAI) is published twice a year by National Shelter, Community Sector Banking, SGS Economics & Planning and the Brotherhood of St Laurence. It measures rents relative to household incomes, based on new rental agreements.

Generally, the higher the proportion of your income you pay on rent, the more difficult it is to afford. Low-income households paying 30% or more of their income on rent are considered to be in "rental stress" (low-income households are the lowest 40% of households by income). This means they can struggle to pay for other things like food, bills, education and personal debt.

The RAI is based on the premise that when you're paying 30% or more of your income on rent, it's unaffordable. Paying 25-30% is moderately unaffordable, and paying less than 25% is acceptable.

The report argues that people buying investment properties have pushed out aspiring home owners from the housing market. This means that households with middle to higher incomes are spending longer renting, which in turn keeps rents higher, thus impacting lower income renters.

Throughout Australia, the majority of very low-income households are suffering rental stress. The situation is particularly bad for pensioners and single parents. In fact, the report finds that single pensioners would have to move to regional South Australia to find accommodation that wouldn't put them in rental stress.

This is how unaffordable rent is in Australian capital cities, ranked from worst to best.

The RAI didn't have adequate data from the Northern Territory, so Darwin is not included (sorry Darwin).

1. Hobart

Congratulations Hobart – you win the prize for least affordable city to rent in! After overtaking Sydney in the last RAI in May, Hobart has firmed up its position on the leaderboard.

The average rental household in Greater Hobart is looking at paying about 30% of its income on rent. That means that even households with average incomes could be in rental stress. And single part-time working mothers are paying on average 42% of their incomes on rent.

This first prize doesn't mean that rents in Hobart are actually the most expensive in the country. The median income of rental households in Greater Hobart is $61,300 (gross), significantly less than Sydney and Perth. Low incomes are partly to blame for rental stress, but the report's authors also point to an inadequate supply of rental housing and argue that a vision is needed for Hobart to address this lack of affordability.

2. Sydney

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Unsurprisingly, Sydney is up there in the ranks of unaffordable Australian cities.

The average renting household in Greater Sydney spends about 27% of its income on rent. Sydney has a high median income for rental households — $98,500 ($10,000 more than in Melbourne). But people on lower incomes are struggling, spending a much higher proportion of their income on rent. In fact, Sydney is the worst capital city to live in for low-income people, as higher incomes push up rents. For students working part-time and living in share houses, 34% of their income is going on rent, putting them in rental stress.

Within a 15km radius of the Sydney CBD, only Ultimo and Redfern have acceptable rents. The average household has to travel at least 15 to 40km to get to the CBD. The least affordable suburbs in Sydney include Milsons Point, Kirribilli, St Ives, Pyrmont, Point Piper, Edgecliff, Darling Point and Rozelle.

Outside the capital cities, regional NSW ranks as the second least affordable regional area, with the gold medal going to regional Tasmania.

3. Adelaide

Rental affordability in Adelaide has declined the most of any capital city since the last RAI in May, and now it's almost on par with Sydney. The average household is forking out 26% of its income on rent.

4. Brisbane

Rental affordability has actually been steadily improving in Brisbane since the start of last year. That trend continued in this RAI. The average household in Greater Brisbane will be paying 24% of its total income on rent. However, most suburbs in inner to middle Brisbane are still unaffordable.

5. Melbourne

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Melbourne's affordability has been pretty steady in the past few years, with only minor fluctuations. The average household faces spending 24% of its total income on rent. But suburbs further out from the CBD have switched from acceptable to unaffordable rents in the past year, including Keilor, Gisborne, Diamond Creek and Warrandyte. Melbourne's least affordable suburbs include Brighton East, Albert Park, Middle Park, Port Melbourne, Beaumaris and Cromer.

6. Canberra

People in Canberra tend to earn a lot of money. The median rental household in the ACT has an income of $100,800, higher than Sydney. This means Canberra generally has acceptable rental affordability. But it also means that people on low incomes in the ACT are facing particularly unaffordable rents.

7. Perth

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Aaaaand the most affordable capital city in Australia is Perth! The average household is paying about 21% of its income on rent, and that figure is fairly stable. That said, Perth is much less affordable for lower income households.

If this wasn't enough rental affordability information for you...

...you can check out this website, which lets you search suburb by suburb, where specific data is available.