Pressure within the rental market remains elevated, even as vacancy rates show minor signs of easing in some locations. 

Recent data indicates conditions are still well below what would be considered balanced, keeping competition strong for tenants across most capital cities and major regional centres.

New data from SQM Research shows the national vacancy rate increased to 1.3 percent in November, up from 1.2 percent in October. While the change is modest, it reflects a gradual shift as new supply slowly enters the market.

Despite this increase, vacancy rates in all capital cities remain well below the three percent benchmark typically associated with a balanced rental environment. Hobart continues to record the tightest conditions, with a vacancy rate of just 0.4 percent. Perth follows at 0.7 percent, Adelaide at 0.8 percent, and both Darwin and Brisbane sit around one percent.

Sydney recorded a vacancy rate of 1.4 percent, Canberra 1.5 percent, and Melbourne the highest among capitals at two percent. Even so, these figures still indicate significant pressure for tenants.

Advertised rents have stabilised somewhat in recent months, though they remain higher than a year ago. National asking rents are up 5.3 percent year on year, with the average weekly rent now sitting at $668.41.

SQM managing director Louis Christopher says the recent changes reflect normal seasonal patterns rather than a structural shift. While some cities, particularly Sydney, are showing tentative signs of easing, the overall rental market remains undersupplied.

Looking ahead, Christopher expects rental growth in 2026 to be more moderate. Increased construction activity and gradual supply expansion may begin to align more closely with underlying demand, potentially bringing a greater sense of balance to the market for the first time since Covid.