December 2025 rental snapshot: brief relief but market still landlord-leaning

Article by Alison Cheung Communications Manager 15 January 2026

Key points

• Vacancies ticked up in December, but they’re still low across the capitals, with Melbourne the only city sitting at 2% or above.

• After easing late last year, rents are starting to lift again in many markets.

• Even with the seasonal slowdown, landlords are keeping the upper hand in the rental market.

Australia’s rental market ended 2025 with some seasonal easing, but the underlying story remains one of tight supply and renewed rent growth as 2026 begins. Conditions continue to favour landlords in most markets, even though agencies may have noticed a slight drop-off in enquiry volumes in the holiday season.

A seasonal lift in vacancies, not a structural shift

Nationally, the residential vacancy rate rose to 1.4% in December, according to SQM Research’s latest data, up from 1.3% in November. Total vacancies lifted to around 43,850 dwellings, a typical end-of-year increase driven by higher tenant turnover and more listings coming to market.

Despite this lift, vacancy rates remain historically low. As SQM Research’s Head of Property Sam Tate noted, the increase is “largely seasonal” and does little to change the broader picture of a tight rental market.

Rents regain momentum entering January

After some easing through November and December, advertised rents have picked up again in early January. Combined rents increased by 2.4% over the 30 days to 12 January 2026 and are now 5.8% higher than a year ago.

The national average rent sits at $684 per week, while capital city rents average $766 per week. Houses continue to lead rental growth, up by 3.4% over the past month and 7.0% annually, while unit rents rose by 1.0% monthly and 4.1% over the year.

“Importantly, the latest rent data shows renewed upward momentum entering January, suggesting the late-2025 softening in rental growth is likely to be temporary,” Tate said.

“Without a sustained increase in new rental supply, affordability pressures are expected to persist into 2026.”

Capital city snapshot

While no capital city saw vacancy tighten, the pressure is still high across the country with Melbourne the only capital not below the 2% vacancy mark. Every capital city, except Canberra, saw rents increase compared to 12 months ago.

Severely constrained markets

Vacancy rates remain extremely low in these capital cities, signalling ongoing supply shortages. 

• Hobart – vacancy rate steady at 0.4% with only 124 vacancies, combined rents increased by 10.0% annually to $579 

• Perth – vacancy stayed at 0.7% with 1,384 vacancies, combined rents up by 4.5% annually to $772 

• Adelaide – vacancy increased to 0.9% with 1,398 vacancies, combined rents up by 2.8% annually to $634

Tight markets with slightly more breathing room

Here, conditions remain tight, but vacancy rates are still above 1.0%. 

• Brisbane – vacancy up to 1.2% with 4,101 vacancies, combined rents climbing by 7.1% annually to $715 

• Darwin – vacancy steady at 1.0% with 255 vacancies, combined rents increasing by 9.0% annually to $651 

Capital cities where vacancies eased

Tightness in these two capitals eased in December, but this is largely seasonal due to year-end turnover. 

• Sydney – vacancy lifted to 1.8% with 13,252 vacancies, combined rents hiking by 6.7% annually 

• Canberra – vacancy up to 1.9% with 1,142 vacancies, combined rents down by 1.6% annually 

Closest to balance

• Melbourne – vacancy unchanged at 2.0% with 10,667 vacancies, combined rents up by 4.1% annually 

What this means for real estate agencies

The latest findings should come as no surprise for most agencies. Tenant demand remains strong, supply is tight and rental growth is gearing back up in many markets. The end-of-year easing offers a bit of short-term relief, but it hasn’t changed the bigger picture. 

As 2026 begins, tenants are still feeling the pressure, while low vacancies continue to support rents. Managing expectations through clear conversations will be key. Setting expectations early and pricing realistically will matter just as much as efficient leasing.

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Disclaimer: The information enclosed has been sourced from SQM Research and is provided for general information only. It should not be taken as constituting professional advice.    

PropertyMe is not a financial adviser. You should consider seeking independent legal, financial, taxation or other advice to check how the information relates to your unique circumstances.     

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