Rents have fallen in one major city while growth has drastically slowed elsewhere as cost of living pressures have taken the heat out of the market.

New figures from property analytics firm Cotality show rents across the country lifted 0.5 per cent in the three months to September.

This is a significant slowdown from the 1.6 per cent rent increase in the June quarter and the 2.1 per cent rise in the three months to March.

Sydney was the only major city to report a decrease throughout the quarter, with rents sliding 0.4 per cent.

While Canberra recorded a 0.1 per cent increase during the September quarter, rents in the nation’s capital were down 0.3 per cent during the month.

Darwin recorded the strongest national growth at 5.8 per cent as Adelaide rents lifted 1.7 per cent and Brisbane prices jumped 1.3 per cent for the quarter.

This comes as the rental vacancy rate has lifted from 1.7 per cent to 2.1 per cent – its highest level since January 2025.

Cotality’s research director Tim Lawless said economic pressures were weighing on rental demand, pushing Australians into more affordable accommodation.

“Rental growth was strongest through the pandemic when average household sizes fell sharply as people sought additional space, then experienced a second wind as international borders reopened and rental demand increased without a commensurate uplift in rental supply,” Mr Lawless said.

“The consequence is that renters are reaching an affordability ceiling. Our June affordability data showed rental households were dedicating about 34 per cent of their pre-tax income towards rent, the highest level on record.

“With rental affordability so stretched and broader cost-of-living pressures, rental demand is likely to be restructuring as people form larger households, stay in the family home for longer or look further afield for more affordable accommodation.”

Shifts in the rental market come as inflation remains elevated at four per cent.

It has persistently sat outside of the Reserve Bank of Australia’s 2-3 per cent target band for the past five years, creating mounting price pressures that eat into household savings.

While rents in Sydney fell slightly throughout the quarter, the city continues to have the highest median rent of $843 per week.

The NSW capital is home to the 29 most expensive suburbs for rent in Australia.

Perth follows with the nation’s second highest rents at $798 per week while Darwin is third at $774 and the median rent in Brisbane is $746.

Other figures from realestate.com.au showed rents lifted 1.5 per cent during the September quarter while Sydney prices remained flat.

Darwin continued to record the steepest rent increase, lifting 5.7 per cent, while Melbourne and Adelaide each saw rents lift 0.8 per cent.

REA senior economic analyst Megan Lieu said there was a mismatch between rents in the capital cities compared to the regions.

“Annual growth in regional rents is softening, while the reverse is happening in capital cities,” Ms Lieu said.

“Despite vacancies being slightly lower in regional areas, the improvement in available rentals has been larger at 0.4ppt compared to 0.2ppt in our capitals, which may be influencing price movements.”

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