Australia’s rental market ended 2025 at record levels, with the national median weekly rent reaching $650 in December, up 1.6% over the quarter. Compared to a year earlier, national rents rose 4.8%, adding around $1,560 a year to typical tenant costs.
“The speed at which rents are rising in Australia’s capital cities has slowed from a year ago, though remains elevated in regional areas," said Anne Flaherty (pictured), senior economist, REA Group. “While a slowdown in the pace of rent growth is good news for renters, costs remain a significant challenge for many, with the annual median rent sitting $11,960 higher compared to five years ago."
Nationally, unit rents recorded the strongest growth over the past 12 months, rising 6.7% compared to 3.2% for houses.
Other rental market trackers are seeing a similar pattern. Domain’s latest Rental Report suggests the market is shifting into a new phase as affordability limits bite, with capital city rents still near record highs but less scope to push prices much higher. Separate SQM Research data shows the national vacancy rate lifted slightly to 1.4% in December 2025, yet remains below long‑term averages, underscoring how tight conditions still are.
Among the capitals, Hobart recorded the strongest rent price growth over 2025, lifting 9.1%, followed by Darwin (+8.3%) and Perth (+7.7%).
For houses, Melbourne was the only market to see rents fall over the year, with a 0.9% decline compared to December 2024.
“Over the December quarter, Melbourne was the second-cheapest capital to rent in, behind only Hobart, though the city is on track to become the cheapest due to strong growth in Tasmania,” Flaherty said.
Sydney remained the most expensive city for renters, with a median rent of $760 per week, followed by Perth ($700) and Darwin ($650). Melbourne ($575) and Hobart ($573) were the two most affordable capitals.
“Sydney remains the most expensive city for renters, with a median rent of $760 per week. Compared to Melbourne, renters in Sydney are forking out an extra $9,620 per year, on average,” Flaherty said.
Rent growth in most regional areas outpaced their capital city counterparts over the quarter, with regional Northern Territory (+9.8%), South Australia (+7.5%) and Tasmania (+6.7%) leading the gains.
“Rents were sitting at record highs in every market in December and are expected to reach new records in 2026,” Flaherty said. “While rent growth is expected to continue moderating in 2026, vacancy rates remain low and population growth will fuel demand for more rentals.”
Other analysis points to a more fragmented rental cycle ahead, with some markets still seeing growth, others cooling or stabilising, and outcomes increasingly driven by local supply, demand, and price sensitivity rather than broad-based national momentum.
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