Australian renters are facing some of the toughest conditions in years. Rents have risen sharply, vacancy rates remain near historic lows, and new data suggests the pressure is unlikely to ease significantly in the near term.
Here is what the publicly available data shows about Australia’s rental market in 2026, explained as clearly as I can based on my own research.
How Much Australians Are Paying in Rent in 2026
According to Domain’s September 2025 Rental Report Sydney has the highest average house rent in Australia at $780 per week, while Hobart and Melbourne have the lowest average house rents at approximately $580 per week. Median weekly rents in capital cities have now risen above $700 nationally, according to data from Elders Real Estate.
For those searching for apartments, the picture is similarly challenging. As of early 2026, the average monthly rent for a studio apartment in Australia is around $2,080 per month. A two-bedroom apartment in Sydney’s inner and middle-ring suburbs is already above $650 per week in most areas.
These figures represent a dramatic shift from just five years ago. National rents have surged approximately 44 per cent over the past five years, adding around $204 per week to the median rental value, according to property analytics group Cotality. In the five years prior to 2020, rents rose by just 7.5 per cent or $33 per week.
Rent Prices by State — What the Data Shows
The rental crisis is not uniform across Australia. Some states have seen far larger increases than others. According to Cotality data, Western Australia recorded the biggest rise in asking rents compared to wages over the past five years — rents in WA have jumped 66 per cent compared to wage growth of just 18.5 per cent over the same period. Regional areas have also outpaced capital cities in rent growth over the past 12 months, with regional Western Australia and regional Tasmania recording some of the largest increases.
For context on how housing costs compare to other everyday expenses, see our coverage of Australia’s cost of living.
What the Official ABS Data Shows About Australian Rents
The Australian Bureau of Statistics tracks rental price changes as part of its monthly Consumer Price Index. According to the most recent ABS data at the time of writing:
Rental prices rose 3.8 per cent over the 12 months to February 2026. This follows a period of significantly higher rental inflation — the ABS recorded annual rental inflation peaking at 8.5 per cent in December 2023 before gradually moderating. The overall Housing group rose 7.2 per cent annually to February 2026, with electricity costs, new dwelling prices, and rents all contributing.
The Gap Between Advertised Rents and Official CPI Data
One important nuance in the rental data is the difference between advertised rents and the ABS CPI rental measure. As economist Ben Phillips noted in February 2026, advertised rent growth has been approximately twice what the ABS statistics show in terms of the rental CPI number.
The reason for this gap is straightforward. The ABS measures changes in what all renters — including long-term tenants — are actually paying. Advertised rents only capture what landlords are asking for new tenancies. Since around 2 to 3 per cent of properties change tenants each month, the full impact of higher advertised rents flows through to the CPI measure gradually rather than all at once. For renters who are staying put, increases are typically smaller and slower than for those entering the market fresh.
Why Australian Rents Have Risen So Much
Several structural factors are driving Australia’s rental crisis. Based on publicly available data and research, here is what the evidence points to.
Vacancy Rates Near Historic Lows
Australia’s national rental vacancy rate sat at approximately 1.2 per cent in early 2026, according to data from Elders Real Estate — well below the 2.5 per cent average of the previous decade and far below the 4 to 5 per cent considered a balanced market. When vacancy rates are this low, competition for available properties is intense and landlords can be selective, driving rents higher.
Population Growth and Migration
The return of international migration following the COVID-19 pandemic brought a large wave of new renters into major capital city markets simultaneously. International students returning to universities, skilled migrants arriving under various visa programs, and domestic population movement into major cities all contributed to increased demand for rental properties at a time when supply was constrained.
Insufficient New Housing Supply
Australia is not building enough homes to meet population growth. According to KPMG Australia’s January 2026 residential property market outlook, new dwelling completions would need to be approximately 17 per cent higher than current forecasts to pull rental growth back to normal levels while accommodating expected population growth. Property research group CBRE estimates Australia needs approximately 75,000 new apartments per year to keep pace with demand — but only around 60,000 are expected to be completed annually.
Higher Mortgage Costs Passed to Tenants
The Reserve Bank of Australia raised its official cash rate to 3.85 per cent in February 2026, adding to mortgage costs for property investors. Higher financing costs for landlords tend to be passed on to tenants through higher rents over time, adding further upward pressure on an already tight market. For more on how RBA rate decisions affect everyday Australians, see our Explained section.
What This Means for Renters Right Now
The clearest measure of rental affordability comes from Cotality’s data, which shows the average new renter is now spending 33.4 per cent of their gross income on rent as of early 2026. The standard measure of housing affordability stress is spending more than 30 per cent of income on housing costs — meaning the average new renter in Australia is now beyond that threshold.
Younger Australians are being disproportionately affected. Those entering the rental market for the first time are facing asking rents that have risen at nearly three times the rate of wages over the past five years, according to Cotality research director Tim Lawless. “Tight rental markets, low vacancy rates and limited new supply have combined to push rents sharply higher while incomes have struggled to keep up,” Lawless said in February 2026.
What the Outlook Looks Like for 2026 and Beyond
KPMG Australia projected annual rent growth of approximately 3.5 per cent through 2026 and 2027 — elevated compared to the long-term average but lower than the peak of recent years. Property research group CBRE has taken a more pessimistic view, forecasting a 27 per cent increase in median apartment rents across capital cities by 2030 if construction fails to keep pace with population growth. By 2030, CBRE projects that 83 per cent of two-bedroom apartments across key capital city precincts will have weekly rents exceeding $700, with 36 per cent exceeding $1,000 per week.
Whether those forecasts prove accurate will depend heavily on how quickly new housing supply comes to market, how population growth tracks, and how the RBA’s interest rate decisions affect both construction activity and household budgets.
What is clear from the current data is that Australia’s rental market remains under significant structural pressure in 2026, and relief for renters is unlikely to come quickly. For more on how the broader cost of living is affecting Australian households, see our article on Australia’s grocery prices in 2026.
This article is for general informational purposes only and reflects the author’s own research and understanding of publicly available data. It does not constitute financial advice. Data was accurate at the time of writing — always verify current figures directly with the ABS and other cited sources.