Which Capital Cities are the Most Affordable for Rent in Australia?

Housing Affordability and sentiment Survey 2020-21
Published on April 19th, 2021
  Written by 
Adrian Edlington
Adrian Edlington is PR & Communications Manager at Savvy. With a keen interest in personal finance, car loans, the mortgage industry, cost of living pressures, electric vehicles and renewable technology, Adrian's research includes conducting primary data surveys and analysis of up-to-the-minute secondary Australian data sources. His work on behalf of Savvy has been featured on ABC.net.au The Conversation, the Sydney Morning Herald, AFR, News.com.au, The Age, Herald Sun, Adelaide Now, SBS On The Money, 7News, Car Expert, Which Car, Drive.com.au and more. In his spare time, Adrian enjoys mountain biking and business podcasts.
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Bill Tsouvalas

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Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
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Most expensive capital cities in Australia

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Over the last 12 months, there’s been a lot of ups and downs in rent affordability in Australia in terms of prices and yields. Cities which some thought were unaffordable are now within the grasp of more and more people, as you’ll see below.

This can be explained, at least in part, due to the pandemic and demographic changes. Work From Home has been the “push” for people who’ve wanted tree or sea-changes out of the cities and into the regions, as they no longer have to commute. Few new international student arrivals have also increased vacancies in major cities and suburbs.

If you’re wondering where the most affordable rents are in Australia, we’ve got the latest (January 2021) statistics so you can see which places are most affordable to least affordable, as well as information on regional alternatives and what you can do as an investor to attract higher yields.

The statistics at the end of 2020 – a snapshot

According to property market analytics firm CoreLogic Quarterly Rental Review (December 2020 Quarter), national rental rates rose by 0.6% over the month of December, taking national rents 1.9% higher than the previous calendar year. This was the largest rise since 2018.

Combined capital city rent averaged up 0.7% over the year while regional rents rose 2.9% over the final quarter of 2020 to finish the year 5.3% over 2019.

Unit rental rates declined by 3% although house rents rose 3.9% over 2020. National gross rental yields slipped down to 3.71%, down 0.1% compared to a year earlier. The national rental market ended the year 1.9% higher, against a 3% rise in dwelling values.


The most affordable capital city – Adelaide

The most affordable capital city for rent is Adelaide with a median rent of $410. The change in rents have been modest year-on-year, possibly due to lower city demand due to the COVID-19 pandemic, which usually catered to international medium-term visitors such as students or temporary visa holders. This is reflected in the rental yields dipping slightly.

Combined Houses Units
Current Median Rent
Year-on-Year Change
Current Yield
Yield 2019


Though much is made about Perth and Western Australia being the “boom” capital thanks to the mining sector, the second most affordable rental market is indeed found out west, with a combined median rent for all dwellings of $428. This may not be for long, though, as rents rose 4.6% quarter over quarter and 9.7% over the last twelve months. Population growth also increased 1.5% during the 12 months to March 2020, with the Real Estate Institute of Western Australia tipping an increase of 10 to 15% throughout 2021.

Rental yields also nosed up a tad to 4.45% in 2020, compared with 4.31% a year earlier.

Combined Houses Units
Current Median Rent
Year-on-Year Change
Current Yield
Yield 2019

The outlier – Melbourne

Most surprisingly, Melbourne, usually considered second only to Sydney in terms of affordability, has come in at the third cheapest on the list with a median rent of $438. This is most likely caused by the punishing 112-day lockdown. In Victoria, 8,000 people left Melbourne during the extended lockdown to less restrictive regional areas or interstate where life resumed more or less as normal. Rental yields also suffered as economic activity ground to a halt for most of 2020 dipping from 3.25% to 3.12%.

Combined Houses Units
Current Median Rent
Year-on-Year Change
Current Yield
Yield 2019


Brisbane house and unit rents are at record highs with a combined $448 median rent, beating out Melbourne thanks to their low vacancy rate. There has been a reduction in demand for rents due to the ongoing international border closures. This is reflected in a dip in yields by 0.15%.

Combined Houses Units
Current Median Rent
Year-on-Year Change
Current Yield
Yield 2019


Median rents in Hobart have beat both Brisbane and Melbourne by a handy margin – $460. This is partly due to a drop in vacancies and increased competition. Hobart is the tightest rental market of all capitals at the moment; yields fell on average by 50 basis points also.

Combined Houses Units
Current Median Rent
Year-on-Year Change
Current Yield
Yield 2019


Despite the mining boom being over, Darwin found itself in a prime position for relocation in 2020 recording almost no COVID cases and no lockdowns. WFH and NT’s local tourism destinations means demand was high, recording a combined $491 median rent and an increase in rental yields to boot.

Combined Houses Units
Current Median Rent
Year-on-Year Change
Current Yield
Yield 2019

Knocked off top spot – Sydney

If you’re surprised by this result, most of the industry and market is too. A combined median rent of $556 is the result of a year-on-year change of negative 1.4%. Vacancies due to a lack of international students and job losses have converted some AirBnB apartments into longer-term rentals, shaping a different demand profile for the highly sought-after city. Rental yields also dipped slightly on the back of this shift.

Combined Houses Units
Current Median Rent
Year-on-Year Change
Current Yield
Yield 2019

The least affordable capital city – Canberra

Canberra is officially the most expensive city to rent a house in at $624 and a combined median rent of $586. Canberra experienced virtually no shutdown, making it more attractive to visit or live in. Prices improved as a result as Sydney’s rents dropped. Yields dipped slightly by 0.17%.

Combined Houses Units
Current Median Rent
Year-on-Year Change
Current Yield
Yield 2019

What about the regions?

NSW regions beat the city by wide margins – Bathurst median rents hover around $360; $450 in Newcastle, and $500 in Wollongong. Living in the Victorian Goldfields (Stawell etc.) has a median rent of $268. Bendigo ($350) and Geelong ($390) also come in under the overall median in Melbourne. Cairns in Queensland almost hovers around the median for Brisbane – the Gold Coast beats it roundly at $520, with the Sunshine Coast coming in at $510.

Is buying better than renting?

Buying a home is like buying a retirement; or growing your wealth. But is buying better than renting? The immediate benefits of paying off a mortgage builds equity in an asset; rent just goes to a landlord. However, this “puts your nest eggs in one basket” – if you can save on rent compared with buying, there is potential for funnelling that cash into shares or other diversified investments with higher yields – the ASX Top 50 dividend yield finished with an average 7.41% from 2004 to 2013. In 2019, an Ernst & Young study showed that a renter is better off compared with a buyer in terms of having leftover cash. In the same study, home-owning retirees have three times as much cash on hand as those who rented for most of their lives. Depending on where you live, or where you want to live, renting may be better than buying. It depends on your wealth creation strategy. It’s always best to talk to a financial adviser before making any major decision.

How you can attract renters and maximise rental yield

With yields slipping by 10 basis points (3.81% to 3.71%) nationally over 2020, the hunt for attracting higher quality renters and maximising yields is on in earnest. Here are a few simple tips so you can improve your property and offer a point of difference that renters will pay extra for.

One idea is to offer to furnish the unit. People will pay more for the convenience of moving into a home with couches, beds, fridges, TVs, and other furniture already present. Landlords can increase cashflow by over $200 a week through this alone.

Installing air conditioning or climate control is a big plus for renters – especially in Queensland, Adelaide, Perth, and areas where it can get very toasty during summer. Watch renters flock to heated premises in wintry cities such as Melbourne, Hobart, or Canberra.

Adding a second bathroom can help renters who are shacking up together combine their resources. It not only improves rental return but improves the overall property value.

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This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.

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