National vacancy holds at 1.2% as rents keep climbing: SQM

Australia’s national residential vacancy rate was steady at 1.2% in September, with 36,046 vacant dwellings (down 1,696 from August), according to SQM Research.

Conditions remain tight across most capitals, sustaining upward pressure on advertised rents.

“The national vacancy rate holding at 1.2% suggests the rental market remains very tight, with little sign of meaningful supply increases,” said Louis Christopher (pictured), managing director of SQM Research.

“Sydney and Brisbane continue to see strong tenant demand, while Hobart remains at near record-low vacancy levels. Rents are still rising in most capitals, particularly for houses, despite a slight easing in rental growth rates compared to last year.

“Overall, we are still seeing an undersupplied rental market, although conditions appear to be stabilising in some cities such as Melbourne and Canberra.”

Capital city vacancy highlights

• Sydney: 1.3% (from 1.4%) – 9,617 vacancies; strong demand and limited new supply.
• Melbourne: 1.8% – 9,407 vacancies; more balanced than earlier peaks.
• Brisbane: 0.9% (from 1.0%) – 3,329 vacancies; tight, with moderating rent growth.
• Perth: 0.7% – 1,362 vacancies; among the tightest nationally.
• Adelaide: 0.8% – 1,207 vacancies; supply constraints persist.
• Canberra: 1.6% – 970 vacancies; seasonal patterns in play.
• Darwin: 0.7% (from 0.5%) – 171 vacancies; still very tight.
• Hobart: 0.4% (from 0.5%) – tightest capital; scarce stock.

Rents: Monthly gains, with early signs of plateau

SQM’s monthly read still shows momentum: national combined rents rose 0.8% over 30 days and 4.8% year-on-year, taking the national average to $655/week and the capital-city average to $756/week. By dwelling type, house rents rose 0.3% month-on-month (3.7% YoY) and unit rents 0.5% (3.4% YoY).

Separately, Domain’s September quarter points to emerging stability, with combined-capital house and unit medians holding at $650/week. Domain notes “rental momentum has broken… growth has stalled,” pointing to affordability ceilings, cooling population growth and a gradual lift in investor supply. In Sydney specifically, Domain recorded a quarterly pause at $780/week for houses and $750/week for units – the first house-rent pause in six years.

Rents by capital – monthly pulse

• Sydney: combined rents +1.1% m/m, +5.1% YoY; house rents average $1,098.57/week.
• Melbourne: –0.1% m/m, -4.3% YoY; houses outperform units.
• Brisbane: +0.6% m/m, +5.9% YoY; supported by population inflows.
• Perth: +1.0% m/m, +4.9% YoY; supply still constrained.
• Adelaide: +0.4% m/m, +2.7% YoY; houses average $673.19/week.
• Canberra: –1.3% m/m, +2.1% YoY.
• Darwin: –2.0% m/m, -11.4% YoY.
• Hobart: –0.2% m/m, +8.6% YoY; limited new supply.

What it means for brokers

With national vacancy anchored near 1.2% and monthly rents still rising in many markets, investor serviceability can improve on firmer rental income – but the quarterly plateau cautions against assuming rapid rent growth. Calibrate pre-approvals and servicing buffers to micro-market vacancy and current lease evidence and consider one- to two-year fixed strategies for borrowers seeking near-term certainty while rate volatility persists.

To see the media release and for more property insights, visit the SQM Research website.

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