Australia’s 50 most expensive suburbs to rent revealed

Soaring prices, very low rental vacancy rates and a lack of affordable housing continue to put a strain on Australia’s rental markets and keep us in a rental crisis situation.

While rental price growth has slowed, monthly and annual increases continue to push affordability to its peak.

Meanwhile, there is still growing concern that the supply of rental homes could worsen further as higher mortgage costs take their toll on landlords and government interference makes property investment seem less attractive.

Major cities are bearing the brunt of the crisis, with Hobart, Perth and Adelaide suffering the lowest vacancy rates at 0.6%, 0.5% and 0.6% respectively, indicating a tight rental market in these locations.

Sydney's vacancy rate has dropped a little lower to 1.5%, while Melbourne's rate has risen to 1.7%.

Melbourne and Canberra recorded the highest rental vacancy rate of any state or territory at 1.7% each, but these are still very low vacancy rates putting pressure on rents.

Meanwhile, Hobart showed a significant decline in vacancies, with the rate falling to 0.6% in October, down from 1.3% in the same month of 2023...

The total number of rental vacancies now stands at 36,486 residential properties, a slight decrease from 37,932 the month prior.

The national median weekly asking rent sits at $704 for houses and $619 for units.

And while that might seem affordable for some, there are many suburbs where rental prices are significantly higher.

Australia's 50 priciest suburbs for renters

In fact, the top 30 of Australia’s top 50 most expensive suburbs to rent all have one thing in common:

They’re all located in Sydney.

In fact,16 of the top 20 most expensive suburbs are all nestled in Sydney’s affluent eastern suburbs.

Data shows that Sydney’s harbourside suburb of Vaucluse is Australia’s most expensive place to rent a home with the median weekly rental costs sitting at a whopping $2,950.

It’s somewhat unsurprising though given that the median house price in the area comes in at just over $9 million.

Second and third on the list are also located in Sydney’s affluent eastern suburbs.

Dover Heights has a $2,600 median, giving a 2.33% rental yield, while Double Bay’s $2,500 median rent gives a 1.79% rental yield.

Meanwhile, Bronte, Balgowlah Heights, Bellevue Hill, Clovelly and Clontarf all have a median rent over $2,000 per week.

Here’s the full list:

Rank	Suburb	State	Median rent (per week)	Gross rental yield (%)	Vacancy rate (%)	Annual change (%)
1	Vaucluse	NSW	$2,950	1.7	1.35	5.35
2	Dover Heights	NSW	$2,600	2.33	1.18	8.33
3	Double Bay	NSW	$2,500	1.79	2.37	25
4	Bronte	NSW	$2,200	1.76	1.42	0.22
5	Balgowlah Heights	NSW	$2,200	2.93	0.79	22.22
6	Bellevue Hill	NSW	$2,050	1.06	1.83	-4.66
7	Clovelly	NSW	$2,000	1.49	1.87	8.1
8	Clontarf	NSW	$2,000	2.13	0.79	11.11
9	Mosman	NSW	$1,995	1.59	1.17	3.63
10	North Bondi	NSW	$1,965	2.18	1.75	6.21
11	Coogee	NSW	$1,950	2.02	1.61	18.18
12	Rose Bay	NSW	$1,900	1.67	1.43	7.04
13	Woollahra	NSW	$1,850	2.29	1.93	17.46
14	Curl Curl	NSW	$1,825	2.05	1.03	2.81
15	Queens Park	NSW	$1,800	2.46	1	5.88
16	Castlecrag	NSW	$1,800	2.08	0.95	2.85
17	Longueville	NSW	$1,800	1.65	0.54	-5.27
18	South Coogee	NSW	$1,750	2.6	0.54	5.42
19	Waverley	NSW	$1,750	2.34	1.46	29.62
20	Seaforth	NSW	$1,750	2.27	1.02	9.37
21	Bondi	NSW	$1,700	2.21	2.56	17.24
22	North Bridge	NSW	$1,680	1.72	1.34	12
23	Balgowlah	NSW	$1,650	2.68	0.89	10
24	North Curl Curl	NSW	$1,625	2.25	0.73	1.88
25	Burraneer	NSW	$1,600	2.24	0.51	0
26	Fairlight	NSW	$1,595	2.51	0.87	2.51
27	Randwick	NSW	$1,450	2.51	1.5	11.53
28	Castle Cove	NSW	$1,450	1.9	0.7	11.53
29	Paddington	NSW	$1,400	2.24	2.35	3.7
30	Bondi Junction	NSW	$1,380	2.65	2.6	6.15
31	Brighton	VIC	$1,300	1.97	1.06	8.33
32	City Beach	WA	$1,300	2.16	0.43	8.33
33	Dalkeith	WA	$1,250	1.79	0.48	0
34	Swanbourne	WA	$1,250	2.4	0.48	13.63
35	Mount Claremont	WA	$1,200	3.15	0.15	29.72
36	Black Rock	VIC	$1,200	2.61	0.82	17.07
37	East Melbourne	VIC	$1,150	2.21	2.23	29.21
38	Cottesloe	WA	$1,140	1.6	0.65	3.63
39	Canterbury	VIC	$1,100	1.97	0.9	2.32
40	Sandringham	VIC	$1,025	2.96	0.76	13.88
41	Malvern	VIC	$1,000	1.92	1.28	1.01
42	Claremont	WA	$1,000	2.73	0.86	3.09
43	Brighton East	VIC	$995	2.72	0.96	11.17
44	Hampton	VIC	$995	2.46	0.81	4.73
45	Kew	VIC	$980	2.12	1.02	8.88
46	Mosman Park	WA	$950	2.32	0.61	11.76
47	Bulimba	QLD	$950	2.6	1.43	2.7
48	Middle Park	VIC	$950	2.01	0.9	1.06
49	Hawthorne	QLD	$920	2.39	0.98	0.54
50	Hamilton	QLD	$875	1.51	2	12.9

Source: CoreLogic

Outside of Sydney, Melbourne’s bayside Brighton and City Beach in Perth are the two priciest city suburbs for renters, each with a median weekly rent of $1,300.

Close behind are Dalkeith and Swanbourne, both in Perth, with median rents of $1,250 each.

Bulimba is the most expensive suburb for rental properties in Brisbane, with a median of $950 per week rent.

Rental costs: How do our Aussie cities stack up?

Sydney might dominate the list of the top 30 most expensive suburbs for renting a property, but across city averages, the other city capitals are close behind.

• Sydney’s elusive suburbs drag the city’s median rental price for all dwellings up to $836.98, SQM research shows.
• Perth is next in line, with a $715 combined median rental price for all dwellings.
• Brisbane and Canberra come in third and fourth place with $657.29 per week and $655.82 per week respectively.
• Melbourne is the next in line with a median rental price of $627.09, followed by Adelaide with $609 per week.
• Darwin and Hobart are the most affordable areas to rent, with a city median of $602 and $505 respectively.
• And in terms of the strongest-performing rental market among the capitals over the 12 months to November 2024, the data differs again.
• Interestingly, despite being a more affordable suburb to rent, Adelaide was the strongest performer with combined weekly rent rising 11.3% over the 12-month period and 0.8% month-on-month
• Perth enjoyed an 8.4% increase in its combined weekly rent over the 12-month period, followed by Darwin and Melbourne with 5.6% and 5.3%  increases respectively in their rental rates over the same period.

Month-on-month data indicate that prices may be slowing, with a decline recorded in Sydney, Melbourne, Brisbane and Perth.

Monthly data shows an increase, however, across rent prices in Adelaide, Canberra, Darwin and Hobart.

Has rental growth reached its peak?

Tim Lawless, CoreLogic executive research director, said that after rocketing 39% higher between August 2020 and June 2024, CoreLogic’s national rental index had flatlined over the past two months, demonstrating the weakest rental market conditions since the early phases of the pandemic when rents briefly trended lower.

While rental trends are highly seasonal - with rental growth typically slowing through the middle and end of the year - the annual trend is also slowing.

Tim Lawless

Nationally, the annual pace of rental growth peaked at 9.7% over the 12 months ending November 2021, which was a series high.

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The annual growth trend has since eased back to 7.2%, the lowest annual growth rate since the 12 months ending May 2021.

Despite the slowdown in annual rental growth, most cities are still recording an annual rental trend that is well above the pre-COVID average.

Nationally, rents were rising at the average annual pace of just 2.0% per annum in the ten years before March 2020.

The only capital where the annual change in rents has been less than the pre-COVID decade average is Hobart, where both housing values and rental trends have been weak.

What has caused the slowdown in rents?

Lawless explained that there are several factors at play when it comes to slower rental conditions.

1. Affordability

Affordability is likely to be a key factor constraining further rental growth.

Between March 2020 and June 2024, Australian wages (based on the wage price index) increased by 12.7% while rents have increased by 36.1%.

According to CoreLogic’s latest rental affordability metrics, a household on the median income would be dedicating 32.2% of their gross annual income to pay the median rent, a record high on the series that goes back 20 years.

2. Household formation is shifting

With rental affordability so stretched, patterns of household formation are once again evolving.

Data from the RBA shows the average capital city household reduced in size from around 2.63 residents per dwelling to around 2.53, as group households split during the pandemic.

Smaller households had the effect of amplifying housing demand, especially rental demand.

While this trend has been slow to reverse, the RBA’s latest estimates show households are once again becoming larger.

As group households and multi-generational households become more common and the average household size rebuilds, logically rental demand should ease, Lawless explained.

3. Overseas migration peaked

The peak in net overseas migration in the first quarter of 2023 aligns with the peak rate of rental growth across the unit sector in April 2023.

Since net overseas migration peaked at a record high of 165,000 in the March quarter last year, the quarterly change reduced to 107,000 in the December quarter of 2023; a drop of around 58,000 net overseas migrants to Australia.

While net overseas migration was still about 1.6 times higher than the pre-COVID decade average for the December quarter, it’s a sharp drop from the record high levels of migration.

Overseas arrivals data points to an ongoing slowdown in foreign student arrivals, implying the net overseas migration slowdown has further to go.

With approximately 90% of net migration to Australia arriving on temporary visas, the flow through to rental demand is direct and immediate.

Less migration helps to explain a further reduction in rental demand.

4. Building completions and government programs increased supply

Peripheral factors in the rental slowdown could include the ongoing completion of new dwellings related to the HomeBuilder program and a pickup in investment activity supporting rental supply.

The HomeBuilder grant, which was available between June 2020 and mid-April 2021 saw a surge in dwelling approvals, with commencements subsequently peaking in the June quarter of 2021 at 66,400.

Materials shortages, capacity constraints and cost blowouts have seen a significant lag in delivering this stock through to completion and have likely resulted in a prolonged period of renting for many of those waiting for their new home to be completed.

As more new builds settle, we should see a gradual diminishment in rental demand associated with building delays.

5. Investors are returning to the market

Investor activity has been on the rise, with the volume of lending to investors rising 10.7% over the year to June and the value of lending rising 30.2%.

Investors play a key role in delivering rental supply to the market which may be supporting an alleviation in supply-side pressures, he explained.

That’s why it’s important to own properties in the right suburbs - those where the tenants will be able to afford higher rents over time rather than suburbs where the tenants are only a week or two away from going broke.

In general, these will be locations where tenants are aspirational and have a good income and are likely to have increasing income over time so they can pay you more rent.