There’s a peculiar tension in the air. On one hand, renters in parts of Queensland and Hobart are finally seeing their weekly burdens lighten. On the other, the national conversation still hums with anxiety, and the maths remains brutal: $130,000 is the annual income now needed to avoid rental stress across much of the country. For those not earning six figures, a slice of relief has arrived—but the broader rental market is far from having its ‘aha’ moment.
Let’s start with where the tide seems to be turning. In Queensland, particularly around Bowen, house rents have dropped nearly 20%, a $110 per week slide that would make headlines in any market. Gold Coast suburbs like Runaway Bay and Hollywell have joined the retreat, notching $100 weekly cuts. Even the quaint surrounds of Macleay Island and Bongaree have given back $60 to $80 a week. It’s enough to make renters squint and double-check their lease agreements.
Zoom out, though, and things get more tangled. Hobart may have clocked the largest fall among capital cities—down 2.1%—but in Perth, rents are charging ahead, up 2.3% in the last quarter. Sydney, predictably, still leads the pack at $841 per week, while Melbourne’s modest dip in late 2024 has been quickly neutralised by a fresh 2.3% jump in unit rents. CoreLogic’s February 2025 numbers peg the national median at $643 per week, down a touch from earlier highs. Yet capital city rents, taken in isolation, have actually risen 1.6%. It’s a strange patchwork—cool in parts, stifling in others.
Part of the explanation lies in the late-2024 construction push. Over 25,000 new dwellings hit the market, nudging vacancy rates up to 1.6% in December. It was a brief blip—by January, vacancies had sunk back to 1.0%. But that moment of breathing room allowed renters in some overbuilt suburbs to negotiate better terms, particularly in areas where vacancies crossed the 3% mark. Rent reductions of 5% were not uncommon in such pockets. Tenants, for once, had a sliver of leverage.
The housing squeeze has also shaped social behaviour. Household sizes are up again, reversing pandemic trends. With rents having surged by 36% during the COVID years, the logic is clear: move in with mates, family, even strangers—anyone—if it means not having to shell out $700 a week for a shoebox. The solo-living craze has cooled, replaced by flatshares and makeshift co-living set-ups. It’s not ideal, but it beats moving back in with your parents.
Demographic quirks are playing their part too. The once-dependable flood of international students—a key plank propping up inner-city rental demand—has slowed. That’s been especially noticeable in places like Melbourne’s CBD and Brisbane’s inner-west, where a slight oversupply is finally weighing on prices. The usual suspects, those sleek high-rise apartments that once lured overseas students, are struggling to fill their rooms.
Meanwhile, investor interest has picked up—albeit cautiously. With borrowing costs still high and wage growth sluggish, property owners are recalibrating. The influx of investor-owned stock hasn’t sparked a price war yet, but it’s helped avoid a total chokehold. Some suburbs, particularly in Sydney’s Inner West, are seeing enough listings to cool off the manic bidding wars that dominated last year.
There’s also the matter of shifting work habits. As employers continue nudging staff back into city offices, demand patterns have started to re-centre. The Melbourne unit market, which had taken a hit during peak remote-work phases, is regaining ground. But the jury’s still out on whether the full ‘return to office’ campaign will stick. If the past few years have taught us anything, it’s that workplace culture can change fast.
And yet, despite all these moving pieces, the larger problem looms overhead. Wages haven’t kept pace. Renters across Sydney, where prices are highest, are finding themselves increasingly boxed in. Nationally, a third of the median household income now goes toward rent—and that’s assuming a steady job, no debt, and no childcare or medical curveballs. For single-income households or younger renters, the reality is far grimmer.
Even talk of rents “returning to 2015 levels” doesn’t hold up under scrutiny. Hobart, with its $515 weekly median, comes closest—and only if one squints hard and adjusts for inflation. Everywhere else, 2015 feels like another economic era altogether. Most capitals remain 40 to 60% higher than a decade ago when adjusted for cost-of-living changes.
So what happens next?
Some suburbs are clearly teetering—especially those built out during the student boom or over-hyped by developers. But in other areas, particularly in Perth and resource-linked zones, demand continues to outstrip supply. Construction is still hampered by high material costs and labour shortages. The idea of building our way out of the rental crunch, once a political talking point, now seems laughably optimistic.
As CoreLogic analyst Kaytlin Ezzy puts it, rental affordability “continues to be a drag on growth”. She’s not wrong. The squeeze is so tight in some quarters that even a $15 weekly drop feels like a win. But if a third of your income is still going on rent—or if you need to bring in $130,000 a year just to breathe easy—then a few soft spots in the market won’t exactly make you dance.
Perhaps the best way to describe the current state of things is this: the Australian rental market has reached a sort of uneasy ceasefire. Some suburbs are finally blinking. A few landlords are cutting deals. Renters are adjusting, consolidating, retreating to their bunkers. But no one’s won the war.
And if you’re hoping for rents to tumble across the board—well, maybe don’t hold your breath.
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