Key takeaways
In a strong sign Australia’s rental crisis refuses to subside, Australia's residential dwelling vacancy rate declined to 1.0% in January 2025.
This is down from 1.6% recorded in December 2024.
The total number of rental vacancies fell sharply to 31,822; a significant drop from 47,336 in the previous month.
Over the past month leading up to 12 February 2025, rental prices across Australia's capital city asking rents recorded sharp rises after a period of moderation in 2024.
In Sydney, combined rents increased by 1.4% to $841 per week, driven by a 1.9% rise in unit rents.
Melbourne saw a 1.7% increase, with combined rents reaching $640, supported by a 2.3% jump in unit rents.
Brisbane recorded a 0.6% rise, bringing combined rents to $671, reflecting ongoing demand.
Perth stood out with strong rental growth, as combined rents surged 2.3% to $752 per week, led by a 2.5% increase in house rents.
Adelaide, however, experienced a more subdued market, with combined rents rising slightly by 0.3% to $614.
Canberra’s rental market remained strong, with combined rents increasing by 1.1% to $682, supported by rising demand across both houses and units.
Meanwhile, Darwin and Hobart saw rental declines.
Darwin’s combined rents fell by 1.7% to $605, while Hobart recorded the largest drop among capital cities, with combined rents decreasing 2.1% to $515 per week.
Nationally, combined rents declined by 0.5% to $643 per week, reflecting softening conditions in some regions.
However, the capital city average recorded a 1.6% increase to $737, highlighting varied market trends across the country.
Sydney
| Property Type | Rent ($) | Weekly change | Monthly change | 12 Months change |
|---|---|---|---|---|
| All Houses | $1,043.08 | 8.92 | 0.9% | -0.7% |
| All Units | $702.78 | 3.22 | 1.9% | 1.3% |
| Combined | $840.73 | 5.53 | 1.4% | 0.3% |
Source: SQM Research
Melbourne
| Property Type | Rent ($) | Weekly change | Monthly change | 12 Months change |
|---|---|---|---|---|
| All Houses | $763.21 | 6.79 | 1.2% | 4.2% |
| All Units | $553.17 | 4.83 | 2.3% | 4.1% |
| Combined | $640.12 | 5.64 | 1.7% | 4.2% |
Source: SQM Research
Brisbane
| Property Type | Rent ($) | Weekly change | Monthly change | 12 Months change |
|---|---|---|---|---|
| All Houses | $739.60 | 0.40 | 1.0% | 3.9% |
| All Units | $588.07 | -0.07 | 0.2% | 3.8% |
| Combined | $671.37 | 0.19 | 0.6% | 3.9% |
Source: SQM Research
Perth
| Property Type | Rent ($) | Weekly change | Monthly change | 12 Months change |
|---|---|---|---|---|
| All Houses | $829.84 | 3.16 | 2.5% | 6.7% |
| All Units | $643.19 | -1.19 | 1.9% | 13.2% |
| Combined | $752.27 | 1.35 | 2.3% | 9.0% |
Source: SQM Research
Adelaide
| Property Type | Rent $) | Weekly change | Monthly change | 12 Months change |
|---|---|---|---|---|
| All Houses | $665.22 | -5.22 | -0.3% | 4.4% |
| All Units | $516.29 | -2.29 | 1.9% | 13.8% |
| Combined | $614.43 | -4.22 | 0.3% | 7.0% |
Source: SQM Research
Canberra
| Property Type | Rent ($) | Weekly change | Monthly change | 12 Months change |
|---|---|---|---|---|
| All Houses | $808.35 | -3.35 | 1.0% | 7.8% |
| All Units | $575.87 | 0.13 | 1.2% | 2.3% |
| Combined | $681.55 | -1.45 | 1.1% | 5.1% |
Source: SQM Research
Darwin
| Property Type | Rent ($) | Weekly change | Monthly change | 12 Months change |
|---|---|---|---|---|
| All Houses | $739.25 | 4.75 | -3.2% | 0.7% |
| All Units | $512.63 | 28.37 | -0.1% | 1.7% |
| Combined | $604.64 | 18.78 | -1.7% | 1.3% |
Source: SQM Research
Hobart
| Property Type | Rent 9$) | Weekly change | Monthly change | 12 Months change |
|---|---|---|---|---|
| All Houses | $543.64 | -0.64 | -1.4% | -2.6% |
| All Units | $473.33 | -6.33 | -3.3% | 1.1% |
| Combined | $515.48 | -2.92 | -2.1% | -1.3% |
Source: SQM Research
National
| Property Type | Rent ($) | Weekly change | Monthly change | 12 Months change |
|---|---|---|---|---|
| All Houses | $718.00 | 8.00 | 0.0% | 4.2% |
| All Units | $557.00 | 2.00 | -1.2% | 4.5% |
| Combined | $643.24 | 5.21 | -0.5% | 4.3% |
Source: SQM Research
Cap City Average
| Property Type | Rent ($) | Weekly change | Monthly change | 12 Months change |
|---|---|---|---|---|
| All Houses | $855.00 | 7.00 | 1.4% | 2.2% |
| All Units | $633.00 | 2.00 | 1.8% | 3.8% |
| Combined | $736.79 | 4.34 | 1.6% | 2.9% |
Source: SQM Research
Vacancy Rates - January 2025
| City | Jan 2024 Vacancies | Jan 2024 Vacancy Rate | Dec 2024 Vacancies | Dec 2024 Vacancy Rate | Jan 2025 Vacancies | Jan 2025 Vacancy Rate |
|---|---|---|---|---|---|---|
| Sydney | 9,114 | 1.3% | 15,263 | 2.1% | 10,151 | 1.4% |
| Melbourne | 5,859 | 1.1% | 11,775 | 2.2% | 8,047 | 1.5% |
| Brisbane | 3,327 | 1.0% | 4,274 | 1.2% | 2,877 | 0.8% |
| Perth | 775 | 0.4% | 1,349 | 0.7% | 803 | 0.4% |
| Adelaide | 783 | 0.5% | 1,258 | 0.8% | 754 | 0.5% |
| Canberra | 1,061 | 1.7% | 1,276 | 2.1% | 779 | 1.3% |
| Darwin | 445 | 1.7% | 441 | 1.7% | 281 | 1.1% |
| Hobart | 278 | 1.0% | 164 | 0.6% | 95 | 0.3% |
| National | 32,108 | 1.1% | 47,336 | 1.6% | 31,822 | 1.0% |
Source: SQM Research
In a strong sign Australia’s rental crisis refuses to subside, Australia's residential dwelling vacancy rate declined to 1.0% in January 2025, down from 1.6% recorded in December 2024.
The total number of rental vacancies fell sharply to 31,822; a significant drop from 47,336 in the previous month.
After recording a period of rental easing over the second half of 2024, Sydney’s rental vacancy rate dropped back to 1.4%, with 10,151 rental dwellings now vacant, compared to 15,263 in December.
Melbourne also recorded a sharp decline, with its vacancy rate dropping to 1.5%, representing 8,047 vacant dwellings.
Brisbane recorded a rental vacancy rate of just 0.8%, with 2,877 properties now available for rent.
This is the second-lowest rental vacancy rate ever recorded for Brisbane since SQM’s records begun in 2005.
The record low of 0.7% was registered in May 2022.
Canberra’s vacancy rate dropped to 1.3%, while Perth and Adelaide remained stable at 0.4% and 0.5%, respectively.
Darwin experienced a decline to 1.1%, while Hobart recorded its equal lowest rental vacancy rate ever recorded for itself and among the capitals at just 0.3%.
The sharp decrease in rental vacancies strongly indicates Australia’s rental market crisis is not over and will potentially deteriorate at the start of 2025.
Comment
From a tenant’s perspective, the sharp drop in rental vacancies at the start of 2025 is highly disappointing, especially since there were some glimpses of a moderating rental market in the latter half of 2024.
Is this a one-off abnormality?
Unfortunately, I don’t think it is as our records of February listings to date are lower than what was recorded in January.
As a research house, we are aware of the ongoing under-building that has been occurring.
Over and above this our concern is what is not known.
And that is the real-time, present level of overseas arrivals.
Could there have been another surge in migration levels in recent weeks? We don’t know for sure but clearly, something has driven this retreat in rental vacancies.
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