Australia’s rental market may be showing early signs of easing, but the reality remains clear: vacancy rates are still extremely tight.
According to new data from SQM Research, the national vacancy rate lifted slightly to 1.3% in November, up from 1.2% in October. While this represents a modest increase, it remains well below the 3% level typically associated with a balanced rental market.
Every capital city continues to operate under tight rental conditions, with Hobart sitting at just 0.4%, followed by Perth at 0.7% and Adelaide at 0.8%. Even Melbourne — the highest of the capitals — remains tight at 2%.
National rents have stabilised month-to-month, but are still 5.3% higher than this time last year, with the average weekly asking rent now sitting at $668.41. This reflects ongoing pressure from population growth, constrained housing supply, and sustained tenant demand.
SQM Managing Director Louis Christopher notes that some of the recent easing reflects normal seasonal patterns, particularly in Sydney. Importantly, he suggests that 2026 may mark the first year since Covid where new supply begins to more closely match underlying demand.
For long-term investors, this highlights a key point: even if rental growth moderates, tight vacancy conditions continue to underpin strong rental demand and asset resilience. Understanding where supply is improving — and where it isn’t — will be critical to making informed investment decisions over the next cycle.
