Overview
- National rents rose 1.3% in the December quarter, lifting annual growth to 5.2%, as vacancy rates tightened to 1.7%, well below the pre-COVID average. Rental listings remain scarce, down 11% year-on-year and 17% below the five-year average, with regional markets outpacing capitals (6.2% vs 4.8%).
- Affordability pressures intensify, with households now spending a record 33.4% of income on rent.
Australia’s rental market saw a further uptick in growth during the final quarter of 2025, with Cotality’s latest Quarterly Rental Review revealing a 1.3% rise in national rents in the December quarter, up from 0.9% in Q3 2025.
This lift pushed annual rental growth to 5.2%, a step up from 4.8% in 2024, though still well below the surge in rental costs seen between 2021 and 2023 when rents were consistently rising at an annual rate above 8%.
Low supply continues to drive rental value growth, with national rental listings roughly 11% lower than a year ago through the December quarter and 17% down on the previous five-year average
Key Highlights:
• National median rent reached $681 per week, up $204 per week over five years, marking a cumulative increase of 42.9% since Dec 2020.
• Vacancy rates fell to 1.7%, well below the pre-COVID decade average of 3.3%, as rental listings dropped 11% year-on-year and 17% below the five-year average.
• Regional markets outpaced capitals, with rents up 6.2% compared to 4.8% across the combined capitals.
• Sydney remains the most expensive capital, with median dwelling rents at $817/week, while Hobart is the most affordable at $601/week.
• Darwin led annual growth with an 8.2% rise, followed by Hobart (7.2%), while Melbourne recorded the smallest increase at 2.9%.
Tim Lawless, Cotality’s Research Director, said the result was “bad news” for both renters and inflation.
“The ongoing growth in rental costs is bad news for renters, with Cotality’s national rental index surging 42.9% over the past five years, adding approximately $204/week to the median rental value.”
He said that in contrast, the five years prior saw rents rise by just 7.5% or $33/week. Based on affordability metrics to September, households are now dedicating a record high 33.4% of their pre-tax income to pay rent.
“The reacceleration in rental values is also bad news for inflation and the cash rate outlook as rental costs hold a significant weight in the CPI calculation.”
