While there has been a slight easing in rental availability, conditions remain firmly in favour of landlords across most markets. Vacancy rates continue to sit well below long term averages, reinforcing the imbalance between supply and demand.
SQM Research data shows the national vacancy rate increased marginally to 1.4% in December 2025, up from 1.3% in November. This represents approximately 43,850 vacant dwellings nationwide. According to SQM Research managing director Louis Christopher, the increase reflects a typical seasonal lift rather than a structural shift in the market.
Despite this small rise, vacancy rates remain historically tight. Levels below 2% are generally considered indicative of landlord favourable conditions, and most capitals continue to sit within or below that range.
Sydney and Brisbane continue to experience strong tenant demand, driven by population growth and limited new rental supply. Hobart remains particularly constrained, recording a vacancy rate of just 0.4%, near record lows. Such conditions place significant pressure on renters and support ongoing rental growth.
Melbourne recorded the highest vacancy rate among the capitals at 2%, followed by Canberra at 1.9%. Sydney sits at 1.8%, Brisbane at 1.2%, Darwin at 1%, Adelaide at 0.9%, and Perth at just 0.7%. These figures highlight the uneven nature of rental conditions across the country.
Low vacancy rates have several implications. For landlords, they reduce leasing risk and support pricing power. For tenants, they increase competition, shorten decision timeframes, and often require compromises on price or property features.
Importantly, vacancy rates also influence investor behaviour. Persistently tight conditions can encourage additional investor participation, particularly in markets where yields are improving. However, new supply takes time to deliver, meaning relief is unlikely in the short term.
The seasonal increase observed toward the end of the year is typical as tenants move for work, study, or lifestyle reasons. Once this period passes, vacancy rates often tighten again, particularly in high demand locations.
For buyers, understanding vacancy trends at a suburb level is critical. National averages can mask significant local variation. A market with a low overall vacancy rate may still contain pockets of oversupply, particularly in areas dominated by high density or investor grade stock.
Well located properties with broad tenant appeal continue to lease quickly, even in markets where vacancy rates have edged higher. Poorly located or poorly designed properties are increasingly exposed as tenants become more selective within constrained budgets.
As rental conditions remain tight, careful analysis of local supply pipelines, demographic trends, and tenant preferences is essential. Buyers who take a long term view and prioritise quality are better positioned to navigate these conditions with confidence.
