Australian renters are paying more than ever for housing, with the national median rent climbing to $705 a week as tight supply and low vacancy rates continue to push prices higher across the country.
Cotality’s Quarterly Rental Review for the June quarter found national rents rose 1.6 per cent over the three months to June, slower than the 2.1 per cent increase recorded in the March quarter. Despite the moderation, annual rental growth accelerated to 5.9 per cent from 5.7 per cent in the previous quarter, extending an upward trend that began in mid-2025.
The report shows rents have increased by 40.6 per cent over the past five years, adding an average of $204 a week to household rental costs. During the previous five-year period, median rents rose by $55 a week, or 12.2 per cent.
Cotality Australia’s Head of Research Gerard Burg said rent increases were continuing to outpace household incomes.
“We are seeing a profound shift in affordability across the market. In March this year, the typical household was allocating roughly one-third of their gross income to rent, compared to around 27% just five years ago,” Mr Burg said.
He said affordability was increasingly becoming a limit on further rental growth rather than an indication that conditions were improving.
“While quarterly rental growth has eased slightly, the underlying supply deficit means conditions remain incredibly challenging for tenants.
“We are approaching a threshold where rental affordability acts as an increasing constraint on further growth, particularly in regional areas where lower median incomes mean households are spending upwards of 35% of their income on rent.”
The shortage of available rental properties remains the main factor supporting higher rents.
The national vacancy rate held at 1.6 per cent during the June quarter, below the five-year average of 1.8 per cent, while rental listings remained 16.7 per cent below their long-term average. Darwin recorded the largest listing shortfall, followed by Sydney and Melbourne. Every capital city reported a vacancy rate below 2 per cent, with Adelaide the tightest market at just 1 per cent.
“With vacancy rates compressed so tightly, tenants are left with very little leverage,” Mr Burg said.
“Capital city rents rose faster than regional markets this quarter, reversing a trend of regional outperformance seen between late 2024 and early 2026, largely because regional markets are hitting severe affordability ceilings.”
Sydney remained Australia’s most expensive rental market, with a median weekly rent of $841, although Perth at $784 and Brisbane at $734 have narrowed the gap through stronger rental growth. Melbourne remained the most affordable mainland capital at $641 a week, around $200 less than Sydney, while Hobart recorded the lowest median rent among the capitals at $632. Darwin’s median rent reached $725 despite having the lowest home values of any mainland capital.
The report also found a shift in rental performance between houses and units.
Median house rents increased by 1.7 per cent during the June quarter, compared with 1.2 per cent for units. That marked a reversal from the March quarter, when unit rents had grown faster than house rents.
“Over the longer term, unit rents have grown faster than houses, rising 46.3% over the past five years compared to 38.5% for houses,” Mr Burg noted.
“This was largely driven by a post-pandemic recovery, particularly in Sydney and Melbourne.”
“However, the latest quarter shows diverging trends. Darwin led house rent growth at 4.1%, followed by Hobart at 3.1%, while Canberra recorded the softest house rent growth at 0.9%. For units, Darwin again led at 2.8%, while Sydney unit growth slowed significantly to just 0.9%.”
The quarterly review found rental yields have started to edge higher as rents continue rising while national home values soften.
The national gross rental yield increased to 3.7 per cent in June from around 3.5 per cent at the end of 2025, although yields remain below levels seen before the COVID-19 pandemic. Darwin recorded the highest yield at 6.1 per cent, followed by Hobart at 4.4 per cent and the ACT at 4.2 per cent. Sydney’s yield rose to 3.3 per cent and Melbourne’s to 3.9 per cent as home values declined more rapidly.
Mr Burg said recent tax changes announced in the Federal Budget would add another layer of complexity for property investors.
“Given the changes to investor taxation policy in this year’s Federal Budget, most notably the removal of negative gearing for existing housing stock purchases from 1 July 2027, it is critical to note that gross yields remain well below the cost of capital,” Mr Burg said.
“There are relatively few locations across Australia where a local investor could achieve a positively geared property under typical leverage rates.”
He expects rental yields to continue rising over coming months, although affordability limits are likely to restrain rent increases.
“Looking ahead, we expect gross rental yields to continue moving higher across major capitals over the near term, driven by deteriorating home value growth and sustained rental demand. However, with affordability boundaries stretched to their limits, the pace of rental growth in the coming quarters will increasingly be dictated by what tenants can realistically afford to pay.”
Support Independent Community Journalism
Dear Reader,The Indian Sun exists for one reason: to tell stories that might otherwise go unheard.
We report on local councils, state politics, small businesses and cultural festivals. We focus on the Indian diaspora and the wider multicultural community with care, balance and accountability. We publish in print and online, send regular newsletters and produce video content. We also run media training programs to help community organisations share their own stories.
We operate independently.
Community journalism does not have the backing of large media corporations. Advertising revenue fluctuates. Platform algorithms change. Costs continue to rise. Yet the need for credible, grounded reporting in a multicultural Australia has never been greater.
When you support The Indian Sun, you support:
• Independent reporting on issues affecting migrant communities
• Coverage of local and state decisions that shape daily life
• A platform for small businesses and community groups
• Media training that builds skills within the community
• Journalism accountable to readers
We cannot cover everything, but we work to cover what matters.
If you value thoughtful reporting that reflects Australia’s diversity, we invite you to contribute. Every donation helps us maintain the quality and consistency of our work.
Please consider making a contribution today.
Thank you for your support.
The Indian Sun Team
