Australia’s rental crisis deepens as national vacancy rate hits critical new low

SQM’s Louis Christopher says Hobart has a critically low rental vacancy rate.

---

Australia’s rental crisis has found another gear, with the number of available rental properties plummeting month on month to now sit at “critically low” levels in some areas.

The latest data released by SQM Research has revealed the national residential vacancy rate fell to 1.0 per cent in March, down from 1.1 per cent in February.

This means there are nearly 3000 fewer properties available to rent than there were a month ago. Across Australia, there are now just 31,732 available rental properties.

SQM Research managing director Louis Christopher noted that strong tenant demand continues to absorb available rental stock, resulting in asking rents rising by 5.9 per cent annually.

MORE:Aus ‘lawn addict’s’ $20 hack to get best grass

“The national vacancy rate dropping to 1.0 per cent highlights just how tight Australia’s rental market has become,” Mr Christopher said. “While some markets are showing brief pauses in rental growth, the overall trend remains upward due to the ongoing imbalance between supply and demand.”

Renters queue to inspect a property. Picture: Adam Yip

---

Mr Christopher said a shortage of construction completions, combined with a continuing intake of new residents is putting further upward pressure on prices.

MORE:Aussie reveals 10 cent trick to slash mortgage

“Without a significant increase in new housing supply and/or a stabilisation of population growth rates, it is likely that rental pressures will remain elevated throughout 2026,” he said.

Vacancies are tight in all capital cities, but some worse than others, the research showed.

Darwin and Hobart were the toughest markets, with vacancy rates of 0.4 per cent. Darwin had just 93 rental properties available, while Hobart had 121.

Perth’s rate of 0.5 per cent was next worst, followed by Adelaide (0.7 per cent) and Brisbane (0.8 per cent). Sydney and Canberra both had 1.1 per cent rates, while Melbourne had the most availability at 1.4 per cent, but had still fallen from 1.6 per cent a month earlier.

“We are now seeing vacancy rates at critically low levels in several cities, particularly Perth, Darwin and Hobart,” Mr Christopher said.

Hobart rents are now 12.5 per cent higher year on year, followed by Darwin (10.2 per cent), Sydney (7.4 per cent), Perth (6.9 per cent) and Brisbane (6.8 per cent).

“These accelerated rates of rental increases will no doubt feed through to the CPI at some point this year,” Mr Christopher said.

The news comes as a separate study by Cotality showed rents rose at a national level by 2.1 per cent over the three months to March, leading to a deterioration in rental affordability, where tenants now commit a record 33.1 per cent of their household income to rent.