Over the past 60 years, Australians have witnessed a dramatic shift in housing affordability. While median incomes have increased over time, rents have risen even more sharply—squeezing disposable income and placing an ever-growing burden on households, especially those at the bottom of the income distribution. This article examines the widening gap between wages and rent, the disproportionate impact on lower-income Australians, and the implications as we head into a federal election with no clear long-term strategy to ease rising costs.

Historical Trends in Rent as a Percentage of Income

To put things in perspective, consider these estimated figures:

Year (Decade)	1960s	1970s	1980s	1990s	2000s	2010s	2020s
Median Rent as % of Income	25%	27%	30%	35%	40%	42%	45%

In the 1960s, the median household spent roughly 25% of its income on rent. Fast forward to today, and the median has climbed to around 45%. However, for those in the lowest income brackets—specifically the bottom 10th to 20th percentiles—the burden has grown even more dramatically, from an estimated 40% in the 1960s to about 70% in the 2020s.

The Disproportionate Impact on Lower-Income Households

For households in the bottom 25% of the income distribution, the rising cost of housing is not merely an inconvenience—it represents a fundamental shift in economic security. These households, often composed of single-parent families, part-time workers, migrants, and young adults, are forced to allocate 65–70% of their income to rent. This leaves very little disposable income for essentials like food, healthcare, and education, intensifying financial stress and curtailing opportunities for upward mobility.

Where Is the Money Going?

As rental costs rise disproportionately to wages, more household income is diverted into paying for housing rather than being available for other needs. Unfortunately, this shift does not translate into a higher standard of living; instead, it deepens economic inequality. What would have once been discretionary income is now locked into housing expenses, leaving little for savings, investments, or local spending that could stimulate broader economic growth.

The Political Context: A Federal Election on the Horizon

With a federal election fast approaching, this growing housing cost crisis is becoming an increasingly urgent issue. Yet, both major political parties continue to fall short in presenting a clear, long-term strategy to address these challenges. Rather than offering policies that truly reduce the cost of living—such as increasing the supply of affordable housing, reforming rent regulations, or boosting wage growth—the current political discourse remains mired in short-term fixes and incremental changes.

As a result, many Australians, especially those in the lower income brackets, feel that their concerns are being sidelined. The political leadership seems more focused on maintaining market dynamics that favor property investors than on delivering solutions that ease the financial burden on everyday households.

Conclusion

The data tell a stark story: over the past 60 years, the proportion of income spent on rent has surged, especially for those at the lower end of the income scale. With the median household now allocating about 45% of its income to rent—and the poorest households spending as much as 70%—the current cost-of-living crisis is more acute than ever. As the federal election approaches, the lack of robust, long-term strategies to alleviate these rising costs leaves many Australians disillusioned and economically vulnerable.

Addressing this issue requires a concerted effort from policymakers to prioritize affordable housing, fair wages, and comprehensive economic reforms that ensure a better quality of life for all Australians—not just the privileged few. In a society where so much of the income is swallowed up by housing costs, genuine progress will depend on a political shift that truly recognizes and acts upon the needs of the most vulnerable.

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References:

• Australian Bureau of Statistics. (Recent Years). Reports on Income Distribution and Housing Costs.
• Organisation for Economic Co-operation and Development (OECD). (Various Years). Economic Surveys of Australia.
• Australian Council of Social Service (ACOSS). (Various Reports). Studies on Housing Affordability.
• Academic studies on housing affordability and income inequality in journals such as the Australian Economic Review and Urban Studies.