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<\/p>\nThe home rental market is “hitting a speed limit” and “starting to rebalance”, with prices flat in some Australian capital cities as tenants reach the limits of what they can pay,\u00a0according to property portal Domain.<\/p>\n
House rental asking prices fell or were stagnant in Melbourne, Adelaide, Perth and Darwin over the past three months, Domain’s December Quarter Rent Report found.<\/p>\n
Even so, house rents across Australia’s combined capital cities rose a total of 2.3 per cent \u2014 or $15 \u2014 over the quarter, with Brisbane (3.1 per cent increase), Hobart (1.7 per cent) and Canberra (1.4 per cent) leading the way.<\/p>\n
Over the 12 months to December, Hobart saw a 7.1 per cent increase in house rents \u2014 the most nationally \u2014 followed by Brisbane (6.3 per cent) and Perth (4.5 per cent).<\/p>\n
Melbourne was the only capital city to see an annual drop in house rents, with a 1.7 per cent fall. Compared to its record set in September 2024, the median Melbourne house rent was $15 cheaper at $580, the lowest in any other capital city.<\/p>\n
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Many renters are left disappointed across Australia due to a lack of supply. (ABC News: Nick Sas)<\/p>\n
As for the median rental asking price for home units, it stayed flat nationally in the December quarter, even though most cities were already at record levels, with a 3.2 per cent annual spike.<\/p>\n
The mixed trend was a reflection of how unaffordable Australia’s rental market had become in recent years, Domain said.<\/p>\n
It added that an income of more than $100,000 was needed in many cases simply to cover weekly household outgoings, due to the exorbitant levels of rents.<\/p>\n
Sydney rents hit $800 a week<\/p>\n
“The rental growth is hitting a speed limit,” Domain’s Chief of Research and Economics, Nicola Powell, told the ABC.<\/p>\n
“We have seen several years of extreme rates of rental growth and that there is an affordability ceiling.<\/p>\n
“That kind of push-pull between how much budgets can stretch and how high rents are is going to limit the pace of further rental price increases.\u00a0<\/p>\n
“Growth is really harder to sustain and I really think it is going to earmark how it unravels over 2026.”<\/p>\n
The report described the patchy increases as a new phase for the market, with rents still high, but increases slower and more selective.<\/p>\n
Sydney’s median rental asking price for houses rose by 1.3 per cent in the December quarter to an eye-watering $800 a week, with units demanding $750.<\/p>\n
Due to the higher cost of renting houses, there had been a spike in the number of Australians opting for home units in 2025, as renters went in search of more affordable options, Ms Powell said.<\/p>\n
But units had seen stronger rent growth than houses in Melbourne, Brisbane, Adelaide, Canberra and Darwin.<\/p>\n
“Rent changes now depend heavily on where you live and whether you\u2019re renting a house or a unit,” Ms Powell said.<\/p>\n
“The market is no longer moving in one direction.”Units only $15 cheaper than houses<\/p>\n
Canberra (3.6 per cent rise), Brisbane (3.2 per cent) and Darwin (3 per cent) saw the largest increase in the median rental asking price for units, Domain found.\u00a0<\/p>\n
Both Darwin (8.6 per cent) and Brisbane (8.3 per cent) reported impressive bumps in rentals over the past year, with every capital city apart from Hobart \u2014 which reported a 1 per cent fall since December 2024 \u2014 at record levels.<\/p>\n
The average median rent in Australian capital cities was now $650 per week, up $20 from 12 months earlier, only $15 less than houses.<\/p>\n
With Sydney ($750 per week) at the top of the list, Brisbane and Perth (both $650) shared second spot for the most expensive capital city to rent a unit, followed by Darwin ($598) and Melbourne and Canberra (both $580), which tied for fifth spot.<\/p>\n
Limited rental supply in regional areas<\/p>\n
The tightest housing market in 2025 was Hobart, with a rental vacancy rate of just 0.3 per cent, compared to 0.4 per cent a year earlier.<\/p>\n
Also below 1 per cent were Perth (0.5 per cent rental vacancy), Adelaide (0.6 per cent), Darwin (0.7 per cent) and Brisbane (0.9).\u00a0<\/p>\n
Darwin, which had 1.3 per cent rental vacancy a year earlier, saw the biggest fall in availability of 0.6 per cent.<\/p>\n
Regional Australia remains a more difficult place to find rental accommodation, with a vacancy rate of just 0.9 per cent, although it was at a more dire 0.7 per cent just three months earlier.<\/p>\n
Household budgets stretched to limit in capital cities<\/p>\n
Rental vacancy rates in Australia’s capital cities improved 0.3 per cent to 1.1 per cent, driven by Sydney’s rise of 0.5 per cent, to a still tight, but more favourable 1.4 per cent.\u00a0<\/p>\n
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The average median rent for a Sydney home unit is $750 per week. (ABC News: John Gunn)<\/p>\n
Ms Powell said that was due to seasonal factors and vacancy rates would tighten again in the new year period, “when most leases are signed”.<\/p>\n
“Technically speaking, many of our capital cities are seeing the most competitive changeover period that we’ve seen in two years,” she said.<\/p>\n
“We are far away from being out of a rental crisis, irrespective of whether we’ve seen rents start to flatline.<\/p>\n
“That flatlining is really tenants screaming they cannot pay any more.”Interest rises could put upward pressure on rents<\/p>\n
It was not all doom and gloom, though, with Domain hopeful that the shortage of rental homes could ease this year and beyond.<\/p>\n