Key takeaways
Despite a temporary slowdown in rental growth at the end of 2024, vacancy rates have remained low, causing rents to rise again.
February saw tightening rental conditions across capital cities, driven by strong post-holiday tenant demand.
Unit rental markets also tightened, with vacancy rates falling as demand rebounded.
Dwelling approvals rose 6.3% in January, led by a surge in private unit approvals.
Private house approvals increased for the first time in three months, but overall new supply remains weak.
Clearance rates remained stable despite a drop in auction numbers, especially in Melbourne due to the long weekend.
Rent skyrocketed over the last couple of years, but at the end of 2024, the rate of rental increases started to slow down, leading some commentators to predict that this was the end of rising rents because of affordability constraints.
However, in a strong sign that Australia’s rental crisis refuses to subside, vacancy rates have remained low, and rents are starting to rise, so in this week’s Property Insider chat Dr Andrew Wilson unpacks the last My Housing Market Rental Report.
Rental markets tighten
Watch this week’s Property Insiders chat as Dr. Andrew Wilson explains that capital city rental markets tightened over February, with all capitals recording declines in vacancy rates that reflect the resumption of strong tenant demand following the end of the December-January holiday period.
Darwin was the top performer for house rents over February with a monthly increase of 2.1%, followed by Adelaide, Perth and Canberra, each up 0.4%.
Sydney and Brisbane were steady over the month; however, Hobart and Melbourne house rents were lower by 0.7% and 0.8%, respectively.
Sydney continued to report the highest capital city house rents over February at $800 per week with Hobart still the most affordable at $564 per week.
Most capitals continue to report solid annual increases in house rents, with Darwin the highest rising 10.9%, Perth up 7.7%, Brisbane higher by 4.8%, Adelaide up 3.8%, Sydney up 2.6% and Hobart higher by 2.5%.
Canberra's annual house rents were steady; however, Melbourne's rents fell by 0.8% over the year.
Capital city vacancy rates were all down over February and are low everywhere except Canberra, and at these levels will continue to put upward pressure on rents.
Capital city unit rental markets also tightened over February with vacancy rates falling across the board as post-holiday demand surged.
Hobart was the top performer over the month with unit rents up by 8.6%, followed by Adelaide higher by 3.2%, Melbourne up 1.7% and Perth steady.
Monthly unit rents however fell in Sydney, Canberra, Brisbane and Darwin by 1.3%, 1.7%, 1.9% and 3.2% respectively.
All capitals have reported higher unit rents over the past year with Adelaide the top performer up 10.9% followed by Perth up 8.3% Hobart higher by 5.1%, Melbourne up 3.4%, Brisbane up 2.8%, Sydney higher by 2.2% and Canberra up 1.3%.
Sydney remains the clear leader for weekly unit rents at $740, with Hobart still the most affordable but higher at $489 per week.
- Also read:Post-Holiday Rental Markets Tighten | Property Insiders
- Also read:Auction Report Mar 8th 2025 | Clearance Rates Steady Again as Auction Numbers Fall into March
- Also read:Latest Property Asking Prices State by State | Increase in National Property Listings
- Also read:Housing downturn reverses in February | Latest Corelogic Data
- Also read:House Prices Fall Again Over February | Latest Housing Market Stats Dr.Andrew Wilson
Similar to houses, capital city unit vacancy rates are at low levels with the exception of Melbourne at 2.3%.
The easing of seasonal factors impacted capital city rental markets over February as increased post-holiday demand pushed vacancy rates lower in all capitals for both houses and units.
Capital city rental markets are challenging for tenants with lower vacancy rates and fewer choices, and the prospect of the resumption of rental growth that had recently eased.
Home building rises again
Watch this week’s Property Insiders chat as Dr. Andrew Wilson explains that total dwelling approvals rose 6.3% in January, following a bumper result for private units approvals.
Private house building approvals lifted for the first time in three months, but it was not enough to reverse the weakness in late-2024.
Overall, the uptrend in approvals is in place but is arguably still fragile insofar as it is being led by the volatile high-rise units segment (centred on NSW), which questions its sustainability.
Of course building approvals for apartments don’t mean that the dwellings get built for some time, and all future developments will be much more expensive because of rising building costs, meaning they will break up the values of established apartments.
Clearance rates steady again as auction numbers fall into March
As always, we discussed the auction result in this week’s Property Insiders chat.
The early March auction market continues to report generally steady clearance rates, although weekly auction numbers were lower in all capitals, with Melbourne in pause mode due to the long weekend holiday on Labour Day.
The national weekend auction market reported a clearance rate of 63.0% over the past week which was just above the 62.6% reported over the previous week – but well below the 73.1% recorded over the same week last year.
Early-year auction markets have continued to report generally positive results from solid listings reflecting buyer and seller confidence enhanced by the recent RBA interest rate cut.
