Australians face record high rents as agents see 'inquiries flooding in'

Australians are paying record high rents across all the capital cities as low vacancy rates mean tenants are facing "a landlord's market".

Data from property website Domain has revealed a renewed acceleration in rental growth across the capitals, led by Sydney's strongest quarterly increase in four years.

Combined capital city house rents increased by $20 over the June quarter, taking annual growth to its strongest pace in almost two years, according to Domain's June Quarter 2026 Rent Report.

Unit rents rose by a more modest $5, highlighting a growing divergence between the two rental markets.

Sydney recorded its largest quarterly rent increase in four years, with house rents up $50 to a record $850 a week.

Brisbane house rents rose $20 over the quarter to a record $700 a week.

Darwin overtook Perth as Australia's second most expensive rental market for houses and recorded the strongest annual rental growth.

Domain chief retail economist Nicola Powell said renters were "operating in a landlord's market".

"What we have seen, particularly over the recent quarter, is an amalgamation of everything happening in terms of strong rates of population growth, not enough rental supply, an undersupply of housing [and] affordability barriers for tenants transitioning to being a home owner."

Separate figures from realestate.com.au's Market Insight report showed, over the June quarter, the national median weekly advertised rent grew 3.1 per cent to sit at $670 — a new high.

Annually, it pushed national median rents up 6.4 per cent over the year, realestate.com.au said.

It found renters were paying $12,480 more in June 2026, on average nationally, compared to five years ago.

'Inquiries flooding in'

With vacancy rates near record lows nationally, and housing supply remaining constrained, tenants are expected to face more challenging rental conditions, the Domain report noted.

The findings are unsurprising to real estate agent Tanja Cosic, who sees the demand for rentals daily.

"As soon as we list the property online, that ad automatically gets passed on to our database and the inquiries start flooding in," she told The Business.

Ms Cosic said the housing cost squeeze had resulted in more Australians moving in together and jointly applying for rentals to cover costs.

"We have a discussion and they let us know, 'We've got a flatmate who's going to come in or join us,' or perhaps their parents are going to move in with them [or] their cousins," she said.

Student Heath Clark, who rents near his university in inner Sydney, said he had found the juggling act between study and part-time work difficult as he tried to keep up with the cost of his accommodation.

After paying for food, transport and books, he said he did not have much to live on.

"I pull in enough to get through, covering the rent and stuff, but not enough to get ahead," he said.

"Rent here is about $900 a fortnight. I pull in probably about $1,200 [and] really, most of it just [goes] to food and basics."

Markets move on different paths

While rental growth is increasingly being driven by houses, unit rents also rose modestly, Domain said.

Darwin led the nation's unit market in the quarter, surging 8.3 per cent from $600 to $650 a week, and recording an 18.2 per cent annual growth rate.

Unit rents in Sydney and Hobart climbed 4 per cent during the quarter, while Perth edged up 0.7 per cent.

Melbourne, Brisbane, Adelaide and Canberra remained flat.

Annual growth for Melbourne units slowed to a 4.5 year low, the report said.

Across the dwelling types, Dr Powell said rental markets across the country were "moving in different directions".

"Sydney, Brisbane, Canberra and Darwin are continuing to record strong rental growth," she said.

"In contrast, Melbourne, Adelaide, Perth and Hobart are showing signs that affordability limits are starting to cap further rent increases, even with vacancy rates remaining exceptionally low.

"The real test will come in the months and years ahead as investors adjust to the new policy environment and those decisions begin to flow through to housing availability and rental conditions."

Tight rental market to remain

Three consecutive Reserve Bank interest rate hikes also appear to have put the breaks on rental availability, analysts have noted.

Grattan Institute's Matthew Bowes told The Business property investors were increasingly shying away from the market, and that could be bad news for renters.

"Because we've seen high interest rates for a number of years now, that does reduce housing supply, which means that over time there are fewer choices on the rental market for renters,"

Mr Bowes said.

The national vacancy rate, for both houses and units, remains under 1 per cent, which means fewer than one in 100 rental dwellings are available to lease.

"This is really a story of supply conditions being a problem for a number of years now, and that's just continuing, and we need a sort of more concerted effort by governments to turn that around," Mr Bowes said.

Domain's Dr Powell said it was too early to say whether the government tax policy changes would impact rents.

"My concern comes around the future of what new investment is going to do in Australia and how that is going to feed through," she said.

"We are likely to see fewer new investors coming into the rental space which will eventually tighten rental supply and put further strain on Australia's rental market."