Rising rents push Australian renters to quit saving: Mozo survey

Soaring rents and stagnant wages force majority of Australian renters to abandon their dreams of home ownership

Rising rents push Australian renters to quit saving: Mozo survey

Rising costs and stagnant wages have forced the majority of Australian renters to quit saving for a house deposit.

A survey of over 1,200 renters conducted by financial comparison site Mozo revealed that 70% of those not saving claim it is unaffordable, with 36% saying it is because of a lack of income and 34% blaming the impossibility of saving on their own.

There is also a growing gap between housing costs and wages. While capital city house rentals now command a median of $650 per week, rental prices have surged by 8.3% in the year to September 2024.

On the other hand, wage growth has limped along at just 3.5%, with median weekly earnings at $1,396, according to the Australian Bureau of Statistics (ABS).

The disparity becomes even more pronounced when examining long-term trends. The average mortgage size has ballooned to $642,121, representing a 74% increase over the past decade. During the same period, real wage growth has crawled at a mere 5.88%.

Interestingly, not all renters view their situation negatively. One in five respondents indicated a preference for renting over property ownership, making it the third most common reason for not pursuing homeownership. This shift in mindset suggests a changing relationship with traditional property ownership aspirations.

Current market conditions make it difficult for prospective buyers in the market. For instance, a standard Australian home price is said to stand at $985,900 since September 2024. Most would-be buyers will have to commit themselves to saving nearly $200,000. At a saving of $1,000 per month, this puts one on an almost 17-year journey toward saving the amount needed.