Rebound in tenant demand pushes vacancies lower and keeps upward pressure on rents
Australia’s residential rental market tightened again at the start of 2026, with the national vacancy rate edging down to 1.2% in January from 1.4% in December, according to new figures from SQM Research.
The number of vacant dwellings fell to 37,630 as properties listed over the holiday period were quickly leased, with most major cities recording lower vacancies in January.
In Sydney, the vacancy rate moved down to 1.5% from 1.8%, with 10,987 rental properties available. Melbourne also tightened, with vacancies at 1.7%, down from 2%, and 9,197 dwellings on the market.
Brisbane remained one of the most constrained eastern seaboard markets, with vacancy at 0.9%, compared with 1.2% in December, and 3,339 dwellings available. Perth was tighter still at 0.6%, down from 0.7%, with only 1,153 vacancies, underscoring limited choice for renters.
In Adelaide, vacancy edged down to 0.8% from 0.9%, with 1,216 properties available, while Canberra’s rate dropped to 1.4% from 1.9%, leaving 870 dwellings vacant after a strong burst of leasing following summer.
Darwin’s vacancy rate declined to 0.8% from 1%, with 195 homes sitting empty. Hobart remained one of the most supply‑constrained markets in the country, with vacancy steady at 0.4% and just 112 rental properties available.
Source: SQM Research
Sydney’s combined rents rose 1.7% over the month and are 6.6% higher than a year ago, with house rents averaging $1,133.19 per week. Melbourne’s combined rents increased 2.2% month‑on‑month and 5.2% annually, supported by improving demand for units.
Brisbane saw combined rents climb 1.5% over the month and 8.5% over the year. In Perth, combined rents rose 1.9% on a monthly basis and 4.7% year‑on‑year, consistent with the city’s very low vacancy rate.
Adelaide recorded a 0.4% monthly increase in combined rents and a 4.2% rise over the year. Canberra’s combined rents grew 1% over the month but remain 1% lower than levels recorded a year ago, pointing to a period of stabilisation.
Darwin’s combined rents lifted 1.5% in the month and 9.4% over the year, one of the strongest annual gains nationally. In Hobart, combined rents slipped 0.4% over the month but are still 10.1% higher than a year earlier, reflecting the city’s extremely limited stock.
Commenting on the figures, Sam Tate (pictured right), head of property at SQM Research, said tight conditions are likely to stay in place unless new rental supply improves.
“The decline in the national vacancy rate to 1.2% in January highlights how quickly seasonal increases in rental supply can be absorbed in Australia’s current market,” Tate said. “Most capital cities recorded tightening conditions, particularly Brisbane, Perth and Darwin, where vacancy rates are again sitting below 1%.
“With advertised rents rising in many markets early in the year, it suggests tenant demand remains strong. Unless we see a meaningful increase in new rental supply, upward pressure on rents is likely to persist through the first half of 2026.”
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