After years of rapid rent hikes, Australia’s rental market is showing signs of moderation — though conditions remain tight, particularly for lower-income households and inner-city tenants.

Cotality’s Quarterly Rental Review reveals that national rent growth eased to 1.3% in the June quarter, down from 1.7% in Q1. While rents are still rising, this slowdown represents the lowest second-quarter increase since 2020.

Despite this, demand is still vastly outpacing supply. The national vacancy rate holds at just 1.6%, and rental listings remain 23% below the five-year average, with only around 100,000 available homes advertised in late June. “Rental pressure hasn’t disappeared — it’s just temporarily plateauing,” says economist Kaytlin Ezzy. “Factors like bigger household sizes and reduced migration are easing immediate pressure, but long-term supply constraints remain a challenge.”
Annual rent increases are most prominent in smaller capitals: 

* Darwin: +6.2% 

* Hobart: +5.3% 

* Perth: +4.9% 

* Adelaide: +4.7% 

* Brisbane: +3.8%

Larger cities like Sydney (1.9%) and Melbourne (1.2%) are stabilising — but remain unaffordable for many renters, especially younger workers and students.

Unit rents are now outpacing houses, up 3.7% annually versus 3.3% for freestanding homes. This shift reflects the re-urbanisation of demand, where tenants are prioritising walkability, proximity to employment, and affordability — particularly in Brisbane and Melbourne’s inner fringe suburbs.

For landlords, this signals continued rental income growth — albeit at a slower pace — and highlights the importance of investing in high-demand, low-supply areas for long-term returns.