September 2023
Rental Report

Sydney remains Australia’s most expensive city in which to rent a house and a unit. House asking rents rose for the third consecutive quarter to hit a record high of $720 a week. Despite the continual rise, the pace of rental growth halved compared to the previous quarter. Annual rent hikes also lost momentum, signalling the peak growth rate has passed, although it remains in positive double-digits and marks the longest stretch of annual increases on record, rising for just over three years.

Sydney units experienced a substantial deacceleration of rent growth over the September quarter, rising about five times slower than the previous quarter's record growth rate. Despite the slowest quarterly gain since December 2021, the median weekly asking rent is at a record high of $680, following nine consecutive quarters of growth, the longest stretch ever recorded for the city. Annual growth remains high – the third fastest increase on record at 23.6% – however, it is slower than June’s record. Unit rents continue to outpace houses annually but were slower over the quarter for the first time since early 2022. The price gap between the property types rose but remains low compared to the past three years.

Sydney’s vacancy rate has returned to a record low of 0.9%, last seen in March 2023.

Melbourne house and unit rents rose for the eighth consecutive quarter, marking the longest stretch of rising rents the city has ever seen. House rents are at a record high, providing the second-fastest quarterly and steepest annual increases in the city’s history. This strong growth has resulted in Melbourne losing its status as the most affordable city in which to rent a house for the first time in just over two years.

Unit rents are also at a record high. The quarterly increase has slowed marginally but remains high compared to previous years. Annually, it is the second-fastest increase on record. House rental growth has outpaced units for the first time since December 2021 to widen the price gap between property types – houses are $30 a week more expensive than units – but the difference remains low relative to the past three years.

Melbourne’s vacancy rate has fallen to 0.9%, close to the record low of 0.8% in March 2023.

Brisbane houses saw a deacceleration of rent growth over the September quarter, rising roughly half the pace of the previous quarter. Despite this, weekly asking rent is at a record-high median of $590. Annual growth continues to lose momentum – increasing by 7.3% – the slowest positive increase since March 2021. Unit rental growth has surpassed houses for a year, with the price gap narrowing to its lowest point since December 2020.

Units continue the record-long stretch of rising rents following the ninth consecutive quarter of growth to produce the fastest annual rise ever in the city’s history and a record high median of $550 a week. For the first time, Brisbane is now the second most expensive city in which to rent a unit (jointly with Canberra) and behind only Sydney. Despite these record-breaking headlines, quarterly rental growth was about one-third slower than the previous quarter.

Brisbane’s vacancy rate is edging closer to a record low, currently at 0.7%.

Adelaide houses continue the record-long stretch of rising rents following the thirteenth consecutive quarter of a rise. Despite these consistent increases, quarterly growth has slowed to half the previous quarter's pace and the lowest increase in just over three years. Annual growth has also started to lose momentum marginally, although house rents have risen annually since late 2016.

Adelaide units saw an acceleration of rental growth over the September quarter, rising almost two times faster than the previous quarter to reach a record high of $450. Despite the record, Adelaide is the most affordable city to rent a unit (jointly with Hobart), as rents have previously seen more substantial growth in other capital cities.

Adelaide’s vacancy rate remains close to a record low, currently at 0.3%.

Canberra house rents fell for a second consecutive quarter, marking the steepest quarterly decline in a decade and the steepest annual decline since mid-2014. It bucks the overall national trend of rising rents, with Canberra the only city to experience falling house rents over the quarter and year. Median house rents have hit a two-year low – $35 lower than the March record – a stark comparison to its almost five-year reign as the most expensive city in which to rent a house.

Canberra unit rents held steady for the second consecutive quarter and flatlined over the year to provide the most stable conditions the city has seen in roughly 11 years. Unit rents are $10 lower than the December 2022 record, bucking the national trend to become one of only three capital cities below previous records.

Canberra’s vacancy rate is the highest of all the capital cities at 1.6%, although it has started to decline in recent months.

In Perth, it is the longest stretch of continuous rental price growth the city has recorded as house rents rise for the eighth consecutive quarter and unit rents for the fifth, pushing the median house and unit rents to hit another record high. Despite these consistent increases, quarterly growth is roughly one-third slower than in the previous quarter for both houses and units. Annually, unit growth has also started to lose momentum marginally for the first time in 18 months. At the same time, it was the third steepest annual increase ever seen for house rents. In contrast to the other cities, the rental price gap between houses and units is at its highest dollar figure on record.

Perth’s vacancy rate is at a record low of 0.3%. This lack of vacant rental supply means that Perth is one of the most competitive cities for tenants in Australia, along with Adelaide.

Hobart house and unit rents held over the September quarter, bucking the rising national trend. The steady outcome is a turnaround following the previous quarter’s deep declines. The median house rent recorded the steepest annual decline in roughly a decade, while unit rents flatlined. Overall, house rents are $20 below, and units are $25 lower than the highs in early 2023. Hobart is now the most affordable city in which to rent a house and a unit for the first time since 2016 (jointly with Adelaide for units).

Hobart’s vacancy rate is currently 1% – the second-highest of the capital cities after Canberra. Rental stock remains high relative to historical levels and is more than double annually, keeping it well above its record-low vacancy rate in February 2022 at 0.2%.

The median Darwin house rent remained steady for a second consecutive quarter at the record first achieved in 2012. It is the most stable outcome in roughly four years. Annual growth remains positive but has dramatically slowed compared to the steepest increase in mid-2021.

Unit rents rose over the quarter to recoup half of the previous quarter's loss. The median rent is also higher than at the same time last year, but it is the slowest gain in just over three years.

Darwin’s vacancy rate remains close to the 2022 low, at 0.7%.