Rental affordability has deteriorated over the past year, with new data revealing what tenants are now paying.

For property investors, this highlights ongoing demand pressures in the Australian rental market trends.

According to the PropTrack Rental Affordability Index, renters in New South Wales are facing the highest costs, while Victoria remains the most affordable state.

However, there are early signs of relief, with more properties becoming available in most capital cities.

The report shows rental growth slowed in 2024 compared to 2023, and PropTrack senior economist Paul Ryan expects this trend to continue in 2025.

Still, rental price growth has outpaced income increases, further tightening affordability.

Currently, an Australian household earning the median income of $116,000 can only afford 36% of rentals listed between July and December 2024.

Those in the top 30% income bracket ($177,000 per year) have access to 83% of advertised rentals.

For investors, these figures underscore strong rental demand, particularly for affordable properties, making well-located investments attractive in 2025 despite market shifts.