INDUSTRY NEWSNationalReal Estate News

Rental costs rise sharply as vacancy rates hit record lows across Australia

The top 25 regions in the nation in Suburbtrends’ Rental Pain Index all scored either 100 or 99, underlying the currency of the rental crisis.

Those scores are the two worst, indicating a high proportion of a tenant’s income is spent on rent, a low vacancy rate and a substantial increase in rent over the past year.

The national median figures, based on the worst suburb groups per state, offer a sobering snapshot with a 14.95 per cent median rent increase over 12 months, an average of just 3.24 advertised rentals, a low vacancy rate of 0.77 per cent, and a negative three-month vacancy drop of 0.62 per cent.

Renters in Western Australia face tough conditions with a median rent increase of 17.34 per cent, a 0.57 per cent vacancy rate, and a 0.41 per cent drop in vacancies. 

South Australia isn’t far behind, showing a 13.27 per cent hike in rents and a scant 0.59 per cent vacancy rate. 

New South Wales matches the national trend, seeing a 14.95 per cent rise in rent and a 0.80 per cent vacancy rate. 

Victoria has a somewhat lower 10.15 per cent rent increase and a tight 0.62 per cent vacancy rate, while Queensland reports a 12.78 per cent increase in rents and a 0.71 per cent vacancy rate.

Breaking from the national trend, Tasmania and the ACT are somewhat better for renters. 

Tasmania shows a modest 4.86 per cent rise in rents but a more generous 1.77 per cent vacancy rate. 

The ACT leads with a 4.17 per cent rent increase and a 1.89 per cent vacancy rate. 

The Northern Territory, using data from its 10 worst-performing areas, reports a 9.61 per cent rent hike but a more manageable 1.56 per cent vacancy rate.

“This month, we see NSW and QLD as dominant players in contributing to rental stress, particularly in locations like Thorneside in QLD and Greenacre – South in NSW,” Suburbtrends’ Founder Kent Lardner said. 

“In such areas, renters are allocating as much as 45 per cent of their income to secure housing, an unsustainable financial burden.” 

Thorneside in Queensland topped the national list with a Rental Pain Index of 100, with tenants spending 36 per cent of their income on rent, a vacancy rate of just 0.6 per cent and an average 12-month rental increase of 8 per cent.

Greenacre – South, in NSW, came in second, also with a Rental Pain INdex of 100, with tenants spending 45 per cent of their income on rent, a vacancy rate of zero and an average 12-month rental increase of 24 per cent.

Port Kembla – Warrawong, Maroubra – North and Kingsford, all in NSW, round out the top five, with tenants in each are spending at least 35 per cent of their income on rent. 

New to the index this month are glaring vacancy rates, most notably in the worst affected suburbs, registering below 1 per cent.

“These strikingly low vacancy rates exacerbate the existing rental stress, making it increasingly difficult for renters to find suitable housing,” Mr Lardner said. 

Nationally, among the top 25 worst-affected suburb groups, rental affordability consistently crosses the 35 per cent threshold, often considered well above the tipping point for financial stress. 

Mr Larder said the index also showed that such financial impositions are not limited to any single state but are widespread, flagging a critical issue that needs immediate multi-state intervention. 

“The current index should serve as a stern wake-up call for policymakers,” he said.

“It’s not merely about escalating numbers but about deteriorating living conditions for Australian renters. 

“As we enter the final quarter of the year, there is an urgent need for targeted policy interventions to alleviate the immense strain renters are under.”

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Kylie Dulhunty

Kylie Dulhunty is the Editor at Elite Agent.