Australia’s rental market showed signs of slight easing in February 2025, with the national vacancy rate rising to 1.3%, up from 1.0% in January, according to SQM Research. This increase suggests that more rental properties became available, offering renters a bit more choice compared to the tight conditions seen earlier in the year.
The total number of rental vacancies across Australia rose to 38,427, up from 30,161 in January. While this is still considered a low vacancy rate, it indicates a shift in the market, especially in major cities where rental demand has remained high.
How Major Cities Are Affected
Several cities recorded an uptick in vacancies:
- Sydney: Vacancy rate increased to 1.5% (11,155 vacant dwellings, up from 10,151 in January).
- Melbourne: Jumped to 1.8% (9,326 vacancies, compared to 8,100 last month).
- Brisbane: Rose to 1.0% (3,445 properties now available).
- Canberra: Increased from 1.3% to 1.6%.
- Perth & Adelaide: Slight increases to 0.6% and 0.7%, respectively.
- Darwin: Remained stable at 1.1%.
- Hobart: Rose slightly to 0.6%.
While the increase in rental vacancies is modest, it reflects a shift from the tight rental conditions seen in early 2024. However, vacancy rates remain historically low, keeping pressure on renters.
Rental Prices Continue to Climb
Despite the small rise in vacancy rates, rents across Australia continued to increase, albeit at a more moderate pace than in recent years.
- Sydney: Average rent dipped slightly by 0.1% to $844/week, driven by a 0.4% decrease in house rents.
- Melbourne: Increased by 1.0% to $646/week, with unit rents up 1.7%.
- Brisbane: Up 1.0% to $676/week, reflecting strong demand.
- Perth: Slight growth of 0.3% to $753/week.
- Adelaide: Significant rise of 1.6% to $622/week.
- Canberra: Minor increase of 0.2% to $686/week.
- Darwin: Declined by 1.0% to $598/week.
- Hobart: Increased by 1.5% to $529/week.
On a national level, rents increased by 1.8%, bringing the average weekly rent to $648. The capital city average rose by 0.4% to $737/week.
Expert Insights: What’s Next for Renters?
Louis Christopher, Managing Director of SQM Research, noted that while vacancy rates increased slightly, it doesn’t necessarily indicate a major shift in the rental market:
“Vacancy rates rose slightly in February, but the increase was minimal. Advertised rental properties took about 3-4 days longer to rent compared to January, suggesting a slight easing in demand. However, I expect vacancy rates to drop again in March, which typically sees stronger rental demand.”
Despite the moderate increase in vacancies, rental prices are still rising faster than inflation. This reflects Australia’s ongoing rental crisis, fueled by high population growth and a shortage of new housing developments.
What This Means for Canadian Renters Watching the Market
While this report focuses on Australia, Canadian renters and investors may see similar trends in major cities like Toronto, Vancouver, and Calgary, where vacancy rates remain tight, and rent prices continue to climb. High demand and slow housing development are key factors impacting both markets.
For renters in both countries, 2025 is shaping up to be another challenging year, with rent affordability remaining a major concern.
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