Record spike in capital cities' rental costs hitting tenants hard
Australian renters are spending a record amount of their household income on housing costs, new research shows.
Rents rose 2.1 per cent over the three months to March, up from a 1.2 per cent hike during the past quarter, analysis by property research company Cotality shows.
The figures highlight the gathering pace of renting costs from the cyclical low of 0.9 per cent recorded midway last year.
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The number of rental properties in capital cities has hit a five-year low, new research show. Nine
A chronic shortage of rental properties is driving the uptick in rents.
Households are now forking out a record 33 per cent of median income to pay for rent, compared with a low of 26 per cent in September 2020.
Cotality Australia's head of research Gerard Burg says the sustained rental growth during the past five years had added an estimated $202 per week to typical rent commitments.
"Rent growth had moderated through much of 2024 and into mid-2025, but there's been a lack of supply to meet the demand, which is placing immense pressure on the rental market," he said.
"Vacancy rates remain very tight nationally and the volume of available rental properties is well below where it needs to be. Until supply catches up meaningfully with demand, rental growth is likely to stay elevated."
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Households are now spending 33 per cent of their median income to cover rental costs. Dominic Lorrimer
Rental listings across Australia are 18 per cent below their five-year average.
The shortage is most severe in Sydney and Melbourne, where available stock is 27 per cent and 21 per cent below long-term levels, respectively.
Every capital city recorded a vacancy rate below 2 per cent in the March quarter with the national rate of 1.6 per cent half the 3.2 per cent average for the five years to March 2021.
"When vacancy rates fall to 1.5 per cent or less it leaves renters with very little negotiating power and fewer options," said Berg
"It means renters have to consider alternate options such as share houses, moving to a new area or back in with family."
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