Rental price growth across the country is beginning to moderate, providing some encouragement for tenants who have faced substantial increases in accommodation costs. However, despite the slower pace of growth, advertised rents remain at record levels, demonstrating that affordability pressures continue to affect households in many markets.
The latest REA Rental Report shows that the national median advertised rent reached $675 per week in September, representing an increase of 1.5% during the quarter. This compares with growth of 2.3% in the preceding quarter, indicating that rental prices are rising more slowly than previously.
Although the moderation is a positive development for tenants, slower growth does not mean rental costs are falling. Households entering new leases or searching for alternative accommodation may still encounter significantly higher asking rents than those experienced in previous years.
REA senior economic analyst Megan Lieu says the easing pace of rental growth is being supported by a slight improvement in rental availability. National vacancy rates have increased to 1.5%, reaching their highest level since February 2022.
This improvement suggests that some tenants may be experiencing greater choice when searching for accommodation. However, a vacancy rate of 1.5% remains relatively low and indicates that rental supply is still constrained across much of the country.
When rental properties are scarce, competition between prospective tenants can support higher asking rents. As more accommodation becomes available, landlords may face greater competition and need to consider pricing more carefully to attract suitable tenants.
The national figures also conceal substantial differences between individual capital cities. According to Lieu, the combined capital cities recorded a median house rent of $680 per week, although the cost of renting varies considerably depending on location.
Sydney remains the most expensive capital city rental market for houses, with a median asking rent of $850 per week. Darwin follows at $800, while Perth ranks third at $750 per week.
Canberra recorded a median house rent of $730 per week, followed by Brisbane at $720 and Adelaide at $650. Hobart’s median stands at $630, while Melbourne is the most affordable capital city for rental houses at $595 per week.
These figures highlight the different affordability challenges facing tenants across the country. A household seeking a detached home in Sydney faces substantially higher weekly accommodation costs than one searching in Melbourne, despite both cities being influenced by broader economic conditions.
Local employment opportunities, population movements, housing availability and household incomes can all influence rental prices. The balance between detached houses, apartments and other accommodation options can also affect demand within individual markets.
Brisbane’s median house rent of $720 per week demonstrates that rental affordability remains a significant issue for Queensland households. While the national growth rate has eased, tenants continue to face considerable weekly expenses when securing suitable accommodation.
Rental conditions can also differ substantially between Brisbane suburbs. Established neighbourhoods with convenient transport connections, employment opportunities and access to schools may experience stronger demand than locations with fewer nearby amenities.
For investors, these differences reinforce the importance of examining local rental conditions before purchasing. A strong metropolitan rental market does not guarantee that every property will achieve the same rental return or occupancy rate.
Property condition, layout, parking availability and the amount of competing rental accommodation can all influence tenant demand. Landlords must also consider the financial implications of vacancies, particularly when borrowing and ownership costs remain elevated.
The increase in national vacancy rates may encourage some landlords to adopt more realistic rental expectations. Maintaining properties appropriately and setting competitive asking rents can become increasingly important when tenants have additional options.
Looking ahead, the direction of rental prices may depend partly on whether investors maintain their participation in the residential property market.
Lieu identifies investor activity as an important uncertainty. If fewer investors provide rental accommodation, the available supply of rental properties could become more constrained, potentially placing renewed upward pressure on rents.
However, reduced investor competition in the purchasing market could also create opportunities for other buyers, including owner-occupiers. The eventual effect on rental prices will depend on how these changes interact with broader housing supply and demand.
New residential construction will also influence future rental availability. Additional housing can help accommodate population growth and changing household requirements, although the location and type of new dwellings will determine how effectively they address rental shortages.
For tenants, the moderation in quarterly rental growth from 2.3% to 1.5% provides some indication that the market is moving away from the rapid increases experienced previously.
Nevertheless, the national median advertised rent of $675 per week confirms that accommodation remains expensive. The improvement in vacancies to 1.5% is encouraging, but does not yet represent a substantial increase in available housing.
For property investors, the changing environment highlights the importance of realistic rental assessments, appropriate property selection and sustainable financial planning.
The outlook will ultimately depend on whether rental availability continues to improve while sufficient investment and construction activity supports future demand. Until then, slower rental growth may offer some relief, but affordability is likely to remain a central concern for households across the country.
