Australia’s rental market has tightened further, with SQM Research reporting the national residential vacancy rate fell to 1.1% in February, down from 1.2% in January and 1.3% a year earlier.
Vacant rental listings dropped to 34,572 dwellings nationwide, with most capital cities either stable at very low levels or tightening further.
SQM Research Managing Director Louis Christopher said the result signals more than just normal start‑of‑year churn.
“The national vacancy rate falling to 1.1% shows the rental market remains very tight across most of the country,” Christopher said in a media release. “While some seasonal tightening is expected at this time of year, demand for rental housing is clearly continuing to outstrip available supply and so this move goes beyond normal seasonality.”
Brisbane, Perth, and Darwin remain among the most constrained markets, each with vacancy rates at or below 0.8%. Brisbane and Adelaide both sit at 0.8%, while Perth and Darwin are at just 0.6%.
Sydney’s vacancy rate fell to 1.3% and Melbourne’s to 1.6 %, while Canberra tightened to 1.1%. Hobart, at 0.5%, remains one of the tightest markets despite a slight rise over the month.
“Vacancy rates below 1% in cities such as Brisbane, Perth, and Darwin highlight just how constrained rental supply remains in parts of Australia,” Christopher said.
For brokers, these conditions may drive more first-home buyers to consider ownership as rents climb, while also pulling in investors looking to capitalise on low vacancies and strong tenant demand.
National advertised rents rose 1% over the past 30 days and are 6.6% higher than a year ago, with the combined national average now $688.76 per week and capital city rents averaging $782.57. House rents increased 7.8% annually and unit rents 4.6%, with particularly strong rent gains in Brisbane, Darwin, and Hobart.
Fresh analysis from Ray White chief economist Nerida Conisbee, pointing to national weekly house rents at $650 and units at $625 with annual growth of around 5%, reinforces that conditions remain tough for tenants.
“With advertised rents continuing to accelerate higher, the data suggests tenants are still facing strong competition for available properties,” Christopher said.
He warned that without a material lift in new housing supply or an easing in demand, rental pressures are likely to persist “through much of 2026, which may feed into the CPI.”
The rental vacancy data was released after SQM has downgraded its capital city price forecasts to 0%–3% growth, citing higher rates and inflation that are already squeezing borrowing capacity.
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