Winter lull sees slight rise in rental vacancies, but pressure persists

Australia’s rental market showed a minor easing in June, with the national vacancy rate rising from 1.2% to 1.3%, according to the latest data from SQM Research.

While the monthly increase hints at early signs of stabilisation, the broader picture remains one of tight supply and ongoing stress for renters.

SQM calculates vacancy rates based on rental listings that have been advertised online for three weeks or more, a methodology it considers superior to partial agency surveys or raw listing counts.

New data from the ABS supports this cooling trend, with rental inflation easing from a peak of 8.5% in December 2023 to 5.5% by April 2025. The Domain Rent Report for June 2025 also confirmed house rents across the combined capitals remained stable for the fourth straight quarter — the first time this has occurred since 2019.

Most capitals remain tight despite winter lift

Although some capital cities saw small vacancy increases, most markets remain highly competitive:

• Sydney: Vacancy rate rose to 1.5%, stable since April, up 0.1% year-on-year
• Melbourne: Vacancy climbed to 1.8%, reflecting easing demand or new supply
• Brisbane, Perth, Adelaide, Darwin, and Hobart: All under 1%, maintaining intense pressure on tenants
• Canberra: Stabilised after earlier sharp declines, possibly due to new leasing activity or moderate supply gains

“The marginal increase in vacancies nationally should not be interpreted as a market turnaround,” said Louis Christopher (pictured), managing director of SQM Research. “Most regions still show signs of stress, and the recent spike in dwelling approvals needs to translate into physical supply before rental conditions meaningfully improve.

“June's figures suggest the beginning of a seasonal rebalancing in some regions. However, we are far from a renter’s market, especially in cities like Darwin and Hobart where vacancy rates are critically low.”

Rents show mixed momentum across capitals

SQM Research’s Weekly Rents Index, for the week ending June 12, revealed a national average rent of $645.44, down slightly week-on-week but still up 3.3% year-on-year.

Highlights by city include:

• Sydney: $852.19 (↓ $0.75); monthly -0.3%, annual +1.8%. Unit rents up; house rents softening.
• Melbourne: $654.27 (↓ $0.17); monthly +0.6%, annual +2.8%. Houses remain steady; seasonal lull noted.
• Brisbane: $689.01 (↓ $0.49); monthly +0.7%, annual +3.8%. Solid growth for both units and houses.
• Perth: $758.63 (↑ $2.36); monthly +0.1%, annual +5.7%. Outer-metro house rents surged $5.44.
• Adelaide: $622.82 (↓ $0.03); monthly +1.7%, annual +4.5%. Unit affordability driving demand.
• Canberra: $676.29 (↑ $1.15); monthly +0.1%, annual +3.6%. Unit rebound offsets house weakness.
• Darwin: $639.77 (↑ $7.02); monthly +1.0%, annual +13.9%. National low vacancy drives rapid rent growth.
• Hobart: $542.69 (↓ $1.24); monthly -0.5%, annual +6.5%. Houses soften, but unit rents still rising.

Darwin and Hobart remain markets to watch

The standout performer was Darwin, where combined rents surged over 1% in a single week and nearly 14% year-on-year, driven by extremely low vacancy. Hobart, despite a winter pullback, continues to post solid annual gains, particularly in the unit market.

For more property insights, head over to the SQM Research website.