Australia's rental market showed little relief in July, with the national vacancy rate unchanged at 1.3%, according to the latest figures from SQM Research.
Total vacancies edged up to 40,771 dwellings from 39,229 in June, a modest gain that has done little to ease pressure in the country's tightest markets.
The rent gains are doing little to ease pressure on the investor side of the ledger either. Separate Cotality research found just 0.8% of Australian suburbs deliver positive cash flow for investors, with research director Tim Lawless noting yields remain well short of breakeven even as prices fall.
Five capital cities — Brisbane, Perth, Adelaide, Darwin, and Hobart — recorded vacancy rates below 1%, underscoring how constrained rental supply remains despite a slight annual increase in availability compared with July 2025, when the national rate sat at 1.2%.
Conditions varied sharply between cities. Sydney and Melbourne both posted the loosest vacancy rates among the capitals at 1.7%, while Canberra recorded the highest nationally at 1.8%. At the other end of the scale, Darwin remained the tightest market in the country at just 0.3%, with only 67 dwellings available, followed by Adelaide and Hobart at 0.6% each.
National combined rents rose 7.2% over the past year, though monthly growth slowed to 0.2%, which SQM attributed to typical seasonal winter softness. The national combined rent average now sits at $698.45 per week, with capital cities averaging $796.51.
Unit rents are outpacing houses, up 7.7% annually against 6.8% for houses. Darwin posted the strongest annual rental growth of any capital at 14.1%, followed by Hobart at 12.2%, both markets where vacancy rates remain extremely low.
"The national vacancy rate holding at 1.3% in July suggests there has been some stabilisation in rental availability, although the underlying market remains tight," SQM Research managing director Louis Christopher (pictured) said.
"The rental data continues to show significant pressure on tenants. National asking rents are now 7.2% higher than a year ago, and we are seeing particularly strong annual increases in Darwin and Hobart, where vacancy rates remain very low.
"Until we see a more sustained increase in available rental stock, we expect affordability pressures to remain elevated."
There are early signs of a supply response, with dwelling approvals rising 7.2% in June, ending three months of declines, with unit and townhouse approvals surging 17.8%.
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