Sydney renters are now spending an extra $1,600 a year more on rent than a year ago as weekly prices hit a new record high, according to the latest realestate.com.au Market Insight.
The median rent price has hit $760 per week, after rising 4.1 per cent over the course of 2025, and it is expected to continue rising this year.
Sydney remains the most expensive capital city to rent in, with a median weekly rent $185 higher than that of Melbourne.
According to REA Group, Sydney renters are typically paying $9,620 per year more than Melburnians.
REA Group senior economist Anne Flaherty.
REA Group senior economist Anne Flaherty said while the rent increase was “significant in dollar terms”, the rate of rent growth has moderated compared to previous years.
“The unfortunate thing is even a relatively normal percentage growth figure – because rents in Sydney are so high – equates to a pretty high dollar increase,” she said.
“It’s around a $1,600 per year increase in the average rent.”
Ms Flaherty said rent growth, albeit at a slower rate, is set to continue this year.
“We are likely to see rents hit new record highs in 2026,” she said.
Annually, unit rents in Sydney grew 7.1 per cent, more double that of houses, which grew 3.2 per cent.
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A unit listed for $750 per week in Sydney’s CBD.
The unit is located on Kent St.
The median weekly rent for Sydney houses now sits at $800, while the median for units rose to $750 per week.
According to Ms Flaherty, Sydney rentals won’t hit a price cap without “a very significant increase to the supply of rental property”.
“Even though we have seen conditions improve a little bit in the rental market, the vacancy rates are still quite low across Sydney,” she said.
“And, population growth is still a factor, particularly international migration.”
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A one-bedroom unit listed in Newtown, in Sydney’s Inner West.
The King St unit is listed for $750 per week.
Ms Flaherty said Sydney’s population growth is driven by new migrants to the country who are much more likely to rent than own in the first few years in which they moved to Australia.
“That migration story is driving that demand for rentals and then of course at the same time you get people who, with the cost of housing, are trapped in the rental market much longer than they had been in the past.
“Even though we’re starting to see some signs of improvement with new supply at the same time the rate of which we’re building new homes isn’t really keeping up with what we need in Sydney.”
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This two-bedroom unit is listed for $750 per week in Merrylands, Western Sydney.
The property is located on Gladstone St, Merrylands.
Ms Flaherty said one positive sign for the market is an increase in investor activities.
“With more investors purchasing property, that actually adds to the supply of rental property and can help to increase the vacancy rates,” she said.
“Another interesting thing that could happen though is with the um home guarantee scheme, we might see a larger number of current renters be able to transition to becoming first home buyers.
“That could free up some stock too.”
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This four-bedroom home in Austral, in Sydney’s south west, is also listed for $750 per week.
Four-bedroom homes in Austral rent for a median of $770 per week.
In regional NSW, rents rose 1.7 per cent over the December quarter, climbing to a weekly price 5.53 per cent higher than a year ago.
With a median weekly rent of $600, it is more expensive to rent in regional NSW than in Melbourne ($575) or Hobart ($573) and as expensive as it is to rent in Adelaide ($600).
Ms Flaherty said this regional price growth was driven by Sydney’s unaffordability.
“In the case of regional NSW, we see people who can’t afford to live in Sydney anymore move further away from the city and in some cases into regional NSW,” she said.
“We don’t see sufficient supply of rental properties in a lot of areas across the region in NSW, which means that when those homes do come up available, they often see quite high levels of competition, and that’s what’s driven the rents up.”
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This three-bedroom home is listed for $750 per week in Charlestown, near Newcastle.
The median rent of regional NSW dwellings has climbed to $600 per week.
Ms Flaherty said Newcastle was a good example of somewhere Sydneysiders are migrating, with a strong lifestyle and the option to work remotely.
“Even though we’re several years on from Covid, it did really rewrite the way people can work,” Ms Flaherty said.
“So, we do have a higher percentage of the population who can work remotely … that can be a driver of increased demand.”
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