Little respite for those trapped on endless rental merry-go-round

When Jane was forced to move house with her two high school-age children for the third time in four years, the costs would wipe out the small savings accrued since the previous relocation.

Despite an annual income of around $120,000, being the sole income earner meant that Perth’s 7.7 per cent annual rent rise made each move more difficult than the last.

“It’s a struggle just to meet the cost of living but moving house incurs so many other expenses, takes weeks of stressful house-hunting up against so many others in the same boat, there are battles with rapacious landlords who unfairly cling onto and chip away at the bond, and yet another rise in rent for an often inferior home.

“It’s brutal, relentless and unsettling for the family,” she told API Magazine, while asking for anonymity for fear of upsetting the current landlord.

For Jane, the idea of saving for a deposit is a far flung dream.

She’s not alone. Households on middle incomes are spending 33 per cent of their wages on housing, according to Cotality data.

It’s a story that is playing out around the country despite rents and vacancy rates finally showing signs of levelling out.

According to Domain, Perth is now equal second with Canberra as the most expensive city in which to rent a house, just behind Sydney.

House rents remain at record highs in all capitals except Darwin but growth is stalling. Sydney, Melbourne and Brisbane recorded their slowest June quarter growth in years, with near zero movement in price.

Even with signs that the worst of the rent rises are over, competition to put a roof over the head is still fierce.

National vacancy rates are still below 2 per cent. Darwin is the tightest market in the country, with a vacancy rate of just 0.3 per cent. 

Rents have risen more than 45 per cent in five years, far outstripping income growth closer to 3 per cent per annum over that period. New builds are easing pressure in some areas, but tight supply remains the norm.

Everybody’s Home spokesperson Maiy Azize on Wednesday (16 July) described the rental situation in Australia as a national crisis that is now pricing out everyday people right across the country.

“As the federal government has walked away from providing housing, more and more people are being forced into an already strained private rental market, which then pushes up rents right across the board. 

“Once-affordable cities like Adelaide, Brisbane, Perth and Hobart are now suffering from some of the most acute rental pressures in the country,” Ms Azize said.

Over the past decade, Adelaide had the biggest rental increase of 81 per cent, followed by Hobart (76 per cent), Brisbane (66 per cent) and Perth (63 per cent).

According to SQM Research’s Weekly Rents Index released Tuesday, national combined rents declined modestly to $645.44, while annual gains held firm at 3.3 per cent.

“With more Australians renting than ever before and being priced out of the private housing market, the need for more low-cost rentals is essential.

“Right now, around 4 per cent of all homes are social housing but to reach 6 per cent, Australia must build more than 36,000 additional social housing dwellings every year for the next decade.

“If we want one in ten homes to be social housing, we need to build an extra 54,000 social homes every year for 20 years.

“Whichever way you look at it, the scale dwarfs current government commitments and lays bare both the enormous demand and decades of chronic underinvestment,” Ms Azize said.

Rental market shifting - slowly

Rental price rises in most major capitals are either stalling or seeing their slowest growth in years.

Now is the first time since 2019 that house rents across the combined capitals have remained stable for four consecutive quarters, signalling a clear turning point in the rental cycle.

Domain’s Chief of Research and Economics, Dr Nicola Powell, said the data signals a much needed pause for renters, and shows the market is shifting.

“Cost of living pressures have reached a tipping point.

“Renters are maxed out and landlords are being forced to hold steady.

“We’re also seeing a shift in demand - renters are downsizing or choosing units to stretch their budgets, which is why unit rents are now rising faster than houses.

“While competition remains tough, early signs of investor activity and first home buyer support could slowly help ease supply pressures and rebalance the market.”

Still a landlord’s market

Vacancy rate data released Tuesday reflected the general pause in rent price increases.

SQM Research found that Australia’s rental market posted a slight uplift in vacancy rates in June 2025, rising nationally from 1.2 per cent to 1.3 per cent.

The slight winter lull left vacancy rates well below the 2 to 3 per cent deemed to be a balanced market.

“While the monthly increase may suggest early signs of stabilisation, many capital cities continue to grapple with persistent undersupply, keeping rental conditions firmly in favour of landlords,” Louis Christopher, Managing Director of SQM Research, said.

“Despite small monthly rises, vacancy rates across most capitals continue to signal demand-driven pressure.

“Landlords in tighter markets may retain pricing power, while renters in cities like Melbourne and Canberra could see gradual shifts toward balance.”

Mr Christopher disputed to the notion that the marginal increase in vacancies nationally should be interpreted as a market turnaround.

“Most regions still show signs of stress, and the recent spike in dwelling approvals needs to translate into physical supply before rental conditions meaningfully improve.

“June’s figures suggest the beginning of a seasonal rebalancing in some regions, however, we are far from a renter’s market, especially in cities like Darwin and Hobart where vacancy rates are critically low.”

Ever higher rents, constant moving and higher prices for food and school expenses just drain the bank account.

- Jane, Perth renter

In Sydney, the combined median rent is $852.19 per week, with the market softening a fraction in June amid seasonal turnover. Unit rents are up and houses down.

Over the last month, the residential vacancy rate for Sydney overall remained stable at 1.7 per cent. The Inner Ring of Sydney also remained stable at 2.0 per cent, while the Middle Ring dropped by 0.2 per cent to be 1.2 per cent and the Outer Ring rose by 0.1 per cent to be 1.7 per cent.

REINSW CEO Tim McKibbin said residential vacancy rates across New South Wales remain at crisis levels.

“Month after month, the situation remains unchanged – rental availability continues to decline while rents keep climbing,” he said.

“It’s easy to understand why so many in the residential rental market are feeling deeply disheartened; there simply isn’t enough housing to meet demand and this is placing enormous strain on the rental market.”

For Jane in Perth talk of the rental market easing rings hollow.

“I try my best to save for a deposit but the ever higher rents, constant moving and higher prices for food and school expenses just drain the bank account, all while property prices keep moving further out of reach.

“It’s hard to see how I can get off this ever diminishing merry-go-round.”