High Income Renters Squeezing Low Income Renters

A report released recently by Australian Housing and Urban Research Institute (AHURI) paper, shows that renters in the top income bracket ($140k plus in 2021) was 8% in 1996 but grew to 24% in 2021.

The increase in top earners renting, pushing rental prices up and squeezing low income earners is a symptom of housing affordability. House growth over the long term outstrips inflation by roughly 3%, or another way of looking at this is the affordability of housing erodes close to 27% over 7 years in the same way that inflation erodes the purchasing power of our income. It’s difficult to quantify what this erosion in affordability of housing actually means, but the the increase in top earners who now rent long term is a good proxy.