Australia’s rental market remains under pressure, with vacancy rates falling to just 1% in January.

According to SQM Research, vacancy rates dropped by 0.5% last month, a period when demand typically rises as workers and students relocate for the new year.

The decline leaves only 31,822 rental properties available nationwide, with further tightening expected.

SQM Research managing director Louis Christopher says the trend reverses an earlier easing in late 2024.

“It looked like there was an easing in the vacancy rate at the end of 2024 and we were coming out of the rental crisis, but that’s not the case now,” he says.

“The rental vacancy rates have tightened up once again to some of the worst numbers we’ve seen during this rental crisis.”

Hobart’s vacancy rate has hit a record low of 0.3%, the lowest since SQM Research began tracking data in 2005.

Other smaller capitals are also struggling, with Perth at 0.4%, Adelaide at 0.5%, and Brisbane at 0.8%. Darwin sits at 1.1%, while Canberra (1.3%), Sydney (1.4%), and Melbourne (1.5%) remain above the national average.

Despite the tightening market, median weekly asking rents for houses remain steady at $718, while unit rents have dipped 1.2% to $557.