Rents rise at slowest pace in years even as supply remains tight
National rental prices increased by 1.3% in the three months to June 2025, marking the smallest second-quarter rise since 2020, according to Cotality’s latest Quarterly Rental Review.
The quarterly growth slowed from 1.7% in the previous period, reflecting a continued moderation in rental increases. Over the 2024-25 financial year, national rents climbed 3.4%, the lowest annual rise since February 2021, when the figure was 3%. Median rents rose by $22 per week, or $1,134 per year.
“The recent moderation in rent growth has occurred despite available rental supply remaining exceptionally low,” said Kaytlin Ezzy, economist at Cotality.
She noted that around 100,000 rental listings were recorded nationally in the four weeks to June 29, about 23% below the five-year average, or 29,000 fewer listings than typical for this time of year.
“The shortfall in rental listings has seen the national vacancy rate slip to 1.6% in June, only slightly above the record lows seen in early 2024 (1.5%), and less than half the pre-COVID decade average of 3.3%.” Ezzy said, “The slowdown in rental growth instead continues to be driven by a tempering in demand, with the normalisation of net overseas migration and a rise in average household size helping to dampen rental demand.”
Affordability remains a concern for many tenants, despite the slower pace of rent increases. Over the past five years, national rents have risen by 42.7%, pushing the median weekly rent up by nearly $200 to $665. This equates to an extra $10,350 per year.
“Considering wages, as measured by the ABS wage price index, are up less than half this rate (15.8%) over the five years to March 2025, it’s no wonder household formation trends are skewing larger as a way of spreading out the additional rental cost,” Ezzy said.
The share of pre-tax income spent on rent has grown from about 26% in June 2020 to just under 33% by December 2024.
Sydney remained the most expensive capital for renters in June, with a median weekly rent of $796. Perth followed at $721, while Brisbane overtook Canberra for third place at $687. Canberra’s median rent was $677. Hobart was the only capital with a median rent below $600, at $581 per week, while Melbourne was the second most affordable at $613.
Regional areas continued to outpace the capitals in rental growth, with combined regions seeing a 1.5% quarterly and 5.3% annual increase, supported by higher net internal migration. The combined capitals posted a 1.3% quarterly and 2.7% annual rise.
Among the capitals, Darwin led annual rental growth at 6.2%, followed by Hobart at 5.3%. Perth and Adelaide recorded increases of 4.9% and 4.7%, respectively, though both saw a slowdown from previous highs. Brisbane’s annual rent growth reached 3.8%, up from a recent low of 3.1% earlier in the year. In contrast, Melbourne, Canberra and Sydney saw annual rent increases of 1.2%, 1.6% and 1.9%, respectively, all below their pre-pandemic averages.
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