[PODCAST] An Investor’s Guide to our Tightening Rental Markets with Dr. Andrew Wilson

Despite predictions of a downturn, Australia's housing market continued to strengthen, with national house prices rising by 1.0% in March, building on earlier gains from February.

In today’s show Dr. Andrew Wilson explains how capital city rental markets have tightened further, with vacancy rates either falling or remaining at historically low levels, pushing rents upwards.

We also discuss how following Trump's announcement of tariffs, market expectations shifted significantly, suggesting a 90% chance of a rate cut in May.

Takeaways

• Australia's housing market is showing signs of recovery with rising prices.
• Rental markets are tightening again after a period of easing.
• Vacancy rates are approaching record lows, indicating strong demand.
• Affordability barriers may limit rental growth despite high demand.
• Economic factors, including interest rates and tariffs, are influencing market sentiment.
• The auction market is expected to see increased activity leading up to Easter.
• Melbourne's rental market is showing signs of improvement after a downturn.
• International student intake has affected the unit rental market.
• Long-term investment strategies are essential for success in property.
• Market sentiment can significantly impact economic performance.

Home rental markets tightening

Capital city rental markets have continued to tighten into 2025, with low and falling vacancy rates reported generally over March and emerging signs of a resumption in rental growth.

Hobart was the top performer for house rents over March, with a monthly increase of 3.5% followed by Adelaide up 1.2%. Melbourne, Brisbane, Perth and Canberra house rents were steady over the month, with Sydney lower by 0.3% and Darwin down 1.4%.

Sydney continued to report the highest capital city house rents in March, at $798 per week, while Hobart remained the most affordable, at $564 per week.

Most capitals have recorded solid annual increases in house rents, with Darwin the highest, rising 9.3%, Hobart higher by 6.1%, Perth up 5.3%, Adelaide up 5.0%, Brisbane higher by

3.2%, Sydney is up 2.2% and Canberra is higher by 0.5%. Melbourne rents, however, have fallen by 1.7% over the year.

Capital city house vacancy rates were mostly lower again over March with the remainder steady with the exception of Adelaide.

All rates remain at very low levels with the exception of Canberra, and will continue to put upward pressure on rents.

Capital city unit rental markets also remained generally tight over March with vacancy rates mostly falling or remaining steady at low levels.

Darwin was the top performer over the month, with unit rents up by 5.7%, followed by Sydney, which was higher by 1.4% and Adelaide, which was up 1.2%.

Melbourne, Perth, and Canberra were steady, with Hobart down 0.8% and Brisbane lower by 1.2%.

Annual unit rents have increased sharply in Adelaide Darwin and Perth up 10.5%, 9.1% and 8.8% respectively with Hobart up 4.3%, Melbourne higher by 1.7% and Canberra up 0.4%.

Sydney and Brisbane unit rents have been steady over the year to March.

Sydney remains the clear leader for weekly unit rents at $750, with Hobart still the most affordable at $485 per week.

Similar to houses, capital city unit vacancy rates have mostly tightened and remain at very low levels, with the exception of Melbourne and Canberra, each at 2.0%.

Links and Resources:

Michael Yardney

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Dr. Andrew Wilson – Chief Economist My Housing Market

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