Rental markets continue to tighten as growth in advertised rents runs well ahead of wage increases, pushing affordability to some of the lowest levels on record for many households.

National rents have increased by 5.4 percent in the 12 months to January and by 43.9 percent over the past five years, a pace that has materially altered the cost of living equation for tenants across metropolitan and regional markets alike.

Regional areas have recorded stronger rental growth over the past year, with combined regional markets up by 6.1 percent compared to 5.1 percent across the combined capital cities, reflecting ongoing migration patterns and limited new supply in lifestyle driven locations.

Regional Western Australia has led rental growth over the past 12 months, followed by Regional Tasmania and Regional South Australia, while in the capital city markets Darwin posted the highest increase, ahead of Hobart and Brisbane.

Cotality Research Director Tim Lawless observes that rents have surged at almost three times the rate of wages over the past five years, a divergence that has reshaped rental stress metrics and eroded household buffers.

Before the pandemic, many renters saw wage growth either slightly ahead of rents or broadly keeping pace, but since 2020 a combination of tight vacancy rates, smaller household sizes, and sluggish new housing supply has shifted bargaining power decisively toward landlords.

Lawless explains that this new phase of the market has rents clearly in the driver’s seat, with limited stock availability enabling sustained price growth despite broader economic pressures.