Australia’s Rental Crisis Deepens
Australia’s rental market entered its fourth consecutive year of acute stress in 2025, with record-low vacancy rates, surging rents, and worsening affordability combining to place the private rental system under unprecedented pressure.
Rents at Record Highs
National median weekly rents reached $650 in December 2025 — a 4.8% annual increase and a cumulative rise of 43.9% over five years. Unit rents rose faster than houses, up 6.7% annually, as demand concentrated in more affordable dwelling types.
The median Australian household now spends 33.4% of gross income on rent — up from 26.2% five years ago.
Vacancy Rates Near Historic Lows
The national vacancy rate held at 1.2% for most of 2025 — less than half the 3% considered healthy. The most constrained markets:
- Perth: consistently below 1.0%
- Adelaide: below 1.0% for most of the year
- Brisbane: 0.9%
- Melbourne: the only capital at or above 2.0%
Why Supply Isn’t Catching Up
Apartment completions of approximately 60,000 per year are running well short of the ~75,000 annually needed to prevent further vacancy rate declines. Construction cost pressures, labour shortages, and financing challenges continue to constrain the pipeline.
For Investors
The tight market underpins strong yield support across all capitals outside Melbourne, with Perth, Brisbane, and Adelaide continuing to offer gross yields above 4%.
