The latest realestate.com.au Market Insight report shows that rents increased by 1.6 per cent over the December quarter and rose 4.8 per cent compared to the previous year, adding an extra $1,560 annually to rental costs.
Unit rentals experienced the strongest growth nationwide, with prices climbing 6.7 per cent over the past 12 months, more than double the 3.2 per cent increase seen in house rentals.
Among capital cities, Hobart led the nation with the strongest rental price growth at 9.1 per cent over 2025, followed by Darwin at 8.3 per cent and Perth at 7.7 per cent.
Melbourne was the only capital city to record a decline in house rents, dropping 0.9 per cent compared to December 2024.
Sydney maintained its position as Australia’s most expensive rental market with a median weekly rent of $760, followed by Perth at $700 and Darwin at $650.
Melbourne and Hobart remained the most affordable capital cities with median weekly rents of $575 and $573 respectively.
Regional areas outpaced their capital city counterparts in rental growth during the December quarter.
Regional Northern Territory recorded the highest increase at 9.8 per cent, followed by regional South Australia at 7.5 per cent and regional Tasmania at 6.7 per cent.
REA Group Senior Economist Anne Flaherty said that while rental growth has slowed in capital cities compared to the previous year, costs remain a significant burden for many Australians.
“While a slowdown in the pace of rent growth is good news for renters, costs remain a significant challenge for many, with the annual median rent sitting $11,960 higher compared to five years ago,” Ms Flaherty said.
The gap between Australia’s most expensive and affordable rental markets continues to widen.
“Compared to Melbourne, renters in Sydney are forking out an extra $9,620 per year, on average,” Ms Flaherty explained.
Melbourne is currently the second most affordable capital city for renters behind Hobart, though this may soon change.
“Melbourne was the second-cheapest capital to rent in, behind only Hobart, though the city is on track to become the cheapest due to strong growth in Tasmania,” Ms Flaherty said.
Despite some moderation in growth rates, the outlook for renters remains challenging with vacancy rates at historically low levels and continued population growth driving demand.
“Rents were sitting at record highs in every market in December and are expected to reach new records in 2026. While rent growth is expected to continue moderating in 2026, vacancy rates remain low and population growth will fuel demand for more rentals,” Ms Flaherty said.
