Rents reach record high
The typical Australian renter is now spending about one third of household income on rent, as affordability reaches new lows.
Annual growth in rental prices accelerated to 5.9% in the June quarter, up from a low of 3.4% in mid-2025, according to a report by data analysis firm Cotality.
Nationally, the median rent climbed to a record $705 a week, even as quarterly growth eased to 1.6% from 2.1% in March.
Cotality head of research Gerard Burg said the market was likely to soften as households became more stretched.
“One of the things we are asking a question about, and there isn't really a clear answer yet, is whether affordability pressures are somewhat of a constraint to how much rents can increase right now,” Burg said.
“Households are devoting about a third of their income to rent.
“That's a record high and really speaks to the general pressure.”
Affordability pressure bites
Sydney remains the most expensive capital city rental market, with a median weekly rent of $841.
Hobart is the cheapest capital city, with a median weekly rent of $632.
Kate Raynor, a fellow at think tank Per Capita, told a parliamentary inquiry into housing inequity in Melbourne that lower-income Australians had seen rents take up a larger share of their incomes since the 1980s.
“Younger Australians are 2.5 to 3.5 times more likely to experience housing stress than those over-65s,” she said.
“We want to stress to the committee, though, that this is not only a story about age; it is fundamentally a story about income.”
Supply shortage drives growth
Rental growth has been driven by a shortage of available homes.
Vacancy rates have been stuck at 1.6% for two quarters, while rental listings are down 17% from the five-year average.
The vacancy rate is lower in almost every capital city than it was 12 months ago, when rents were not as high.
War in the Middle East, the rising cost of living and supply constraints were also significant factors. Yields rose 3.7% across the June quarter, reflecting the downturn in property values since the May budget.
