Capital city rents jump again as regional markets reheat

Rents across Australia’s capital cities are climbing again after a relatively steady 2025, according to the latest realestate.com.au Market Insight.

Median advertised rent in the capitals rose 4.6% over the March quarter to $680 a week, a $30 increase on the December quarter.

Senior economist Angus Moore said: “rent growth remains solid, up 4.6% in the past year across the capital cities,” but noted growth is now below the peaks of 2022–23 as somewhat improved rental availability has slowed the pace of rent increases.

Even so, separate SQM Research figures show the national vacancy rate fell to just 1% in March, with only about 31,700 dwellings available to lease, underscoring how little rental stock is on the market.

Perth, Darwin, and Hobart lead capital growth

Rents rose across all capital cities over the year, with Perth, Darwin, and Hobart posting the strongest gains, in the 7–8% range. Melbourne and Canberra saw more modest increases of 2–3%, leaving Melbourne one of the relative affordability standouts.

“Melbourne is the equal cheapest capital city to rent in, alongside Hobart,” Moore said.

He added that lower rents, combined with higher average incomes, mean Victoria remains “by far, the country’s most affordable state for renters.”

Units continued to outperform houses, with unit rents up 3.1% across the capitals over the quarter compared with smaller increases for houses. That trend may support yield calculations for property investors targeting inner-city or medium-density stock.

Regional rents reaccelerate

Outside the capitals, regional rents grew 4.3% over the year, outpacing capital city rent growth and extending the reacceleration seen in recent years. Several regional markets, including parts of Western Australia, Tasmania, and the Northern Territory, are recording double‑digit annual gains on some measures, tightening conditions for tenants.

National measures such as the Rental Affordability Index also show rental affordability deteriorating further in early 2026, with many lower‑income households now spending well above 30% of their income on rent in the major cities.

Looking ahead, Moore expects only gradual relief.

“The slight improvement in rental availability should see the more modest pace of rent growth recorded over the past 12 months continue throughout the rest of this year,” he said.

Separate forecasts from CBRE suggest rental pressure may persist beyond this year, with capital‑city rents expected to rise by around 5% annually on average through to 2030.

SQM’s latest data also point to national advertised rents being almost 6% higher than a year ago, indicating tight conditions are unlikely to ease quickly in 2026 unless new housing supply lifts materially.

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