Rental Market Growth Slows as Vacancy Rates Edge Up

Australia's rental market is showing signs of cooling, with national rental growth slowing to 0.5 per cent in the third quarter of 2026. This is a notable deceleration compared to the 1.6 per cent growth recorded in the second quarter and 2.1 per cent in the first quarter of the year.

The national rental vacancy rate rose to 2.1 per cent in September. While this remains below the long-term pre-pandemic average of 3.3 per cent, the increase suggests a slight easing of the extreme tightness that has defined the rental sector for much of the past two years.

For renters, this shift may provide a small amount of relief, though conditions remain competitive. The slowdown in rental price growth is being observed alongside a pause in the surge of unit rents, which some analysts attribute to recent government policy changes and a reduction in international migration levels.

Investors are also adjusting to the new environment. While gross rental yields have reached their highest levels in several years, the combination of higher interest rates and new federal government tax changes on property investors is creating a more complex landscape for those holding residential assets.