Australian dwelling rents increased 2.1% in the year’s first quarter amid a lack of supply, with households spending a record amount of income on rent.
National dwelling rents had risen by 1.2% in 2025’s fourth quarter, according to a Cotality report. Year-over-year, rents increased by 5.7% in 2026’s first three months.
“Rent growth had moderated through much of 2024 and into mid-2025, but there’s been a lack of supply to meet the demand, which is placing immense pressure on the rental market," said Cotality Australia head of research Gerard Burg.
“Vacancy rates remain very tight nationally and the volume of available rental properties is well below where it needs to be. Until supply catches up meaningfully with demand, rental growth is likely to stay elevated.”
Five years of sustained rental growth has added around A$202 per week to household rent spending, said Burg.
Households are committing a record 33.1% of gross median household income to rent, the report found.
Darwin reported the largest annual rental percentage increase of any capital city, rising 9.2% to $699 per week. Sydney was the most expensive rental market at $824 per week, while Melbourne and Hobart were the least expensive at $632 and $609 per week.
Rents in regional areas rose 6% year-over-year, outpacing combined capitals' growth of 5.6%.
Nationally, rental listings are around 18% below their five-year average. Sydney and Melbourne posted the most severe inventory shortages, with stock 27.4% and 21.0% below long-term levels.
All capital cities’ vacancy rates were less than 2% last quarter, with a national rate of 1.6%. Adelaide recorded the lowest vacancy rate at just 1%.
“Low vacancy rates and a shortage of available listings have persisted across most capital cities for several years now, and there is little in the current data to suggest conditions are improving,” said Burg.
