(Last updated March 2025 – always check the current state rules)
The Rental Market in March 2025: High Rents, Low Vacancies, Tough Competition
Rents have surged to all-time highs across Australia’s capitals, although the pace of growth has started to moderate. Nationally, rents rose about 4.8% over 2024 – a sharp comedown from the 8.1% surge in 2023. Since the start of the pandemic, cumulative rent increases average 36% (adding roughly $171 per week to the median rent), pushing housing costs to historic levels. The median renting household now spends about 33% of pre-tax income on rent, the highest share in decades. In other words, renting has never been less affordable for Australians, forcing many to delay moving out, take on roommates, or seek smaller homes to cope.
Major cities are leading this rental crunch. Sydney remains the priciest market with a median weekly rent around $770-$780. After a brief slowdown late last year, Sydney’s rent growth is climbing again, especially for apartments (unit rents jumped ~1.9% in a recent month). Melbourne is comparatively affordable (around $600-$640 median rent) but tightening fast – vacancies have plunged to ~1.5%, and annual rent growth was about 4% in 2024 (down from 11% in 2023). Brisbane rents have climbed into the mid-$600s per weekwith vacancy just 0.8% – near the lowest on record. In Perth and Adelaide, the squeeze is even more extreme: Perth’s median rent (around $750/wk) now rivals the big east-coast cities, and its vacancy rate is stuck below 0.5%. Adelaide is similar (rents ~$610 and vacancy ~0.5%), reflecting three years of sub-1% vacancy in those markets. In short, anything under 2% vacancy means demand far exceeds supply, which is exactly the scenario in all capitals right now – even formerly softer markets like Canberra (1.3%) and Hobart (0.3%, an all-time low).
Several factors are driving this demand-supply imbalance. A big one is population growth: Australia’s net overseas migration hit roughly 446,000 in 2024, with most newcomers settling in Sydney, Melbourne, and Brisbane. This wave of students and workers has supercharged rental demand, filling inner-city units that sat empty during COVID. At the same time, new housing supply isn’t keeping up. Construction is lagging due to high costs and labor shortages, and investor activity only recently picked up after a long lull. The result is a “rental crisis” that has worsened into 2025 – national vacancy dropped back to 1.0% in January after temporarily improving over Christmas. Listings that do appear are swarmed by applicants, and industry analysts estimate we’d need 30,000–60,000 additional rentals (on top of what’s available) to reach a balanced market with 2–3% vacancies. Until supply catches up or demand eases, rents are likely to keep climbing – albeit at a slower pace if tenants simply can’t pay more. Persistent low vacancies “continue to rise [rents] due to historically low vacancy rates,” as one property outlook noted.
Regional areas aren’t offering much relief either. The pandemic “tree change” saw many people move to regional towns, pushing those rents up sharply. Over 2024 some regional markets even outpaced the capitals – regional Australia’s rents rose ~6.2% vs 4.3% in capitals. While growth is cooling in some country areas now, vacancies outside the capitals average only ~1.9% (still down from a year ago). Many regional centres (especially in Queensland and Western Australia) remain extremely tight – for example, Geraldton saw rents jump nearly 14% in a year, and Warrnambool in VIC has a tiny 0.3% vacancy. On the other hand, a few inland communities have started seeing inventory build up (e.g. Dubbo’s vacancy ~3–4%), suggesting some renters are returning to cities. Overall though, the squeeze is nation-wide. Whether you’re in a capital city or a regional town, being a renter in 2025 means facing steep competition, rising costs, and tough negotiations with landlords.
New Regulations Are Changing the Game for Renters
If there’s a small silver lining for tenants, it’s that state governments have begun strengthening tenancy laws in response to the rental crisis. Across Australia, new regulations are rolling out to rebalance some power toward renters – aiming to curb the worst rent gouging and improve security of tenure. Here are some key changes:
- Limits on Rent Increases: Most states now limit landlords to one rent increase per 12 months for a given tenancy. This was always the rule in Victoria and Tasmania, and in 2023–24 New South Wales, Queensland, South Australia, and Western Australia all moved to adopt annual increase limits. Practically, this means if you’re on a continuing lease, you shouldn’t face multiple hikes in quick succession. (Note: There’s generally no cap on the amount of an increase in most states, except in the ACT – but at least frequency is controlled.) If a landlord tries to raise rent more often than allowed, the increase would be invalid under the new laws.
- Ending “No Grounds” Evictions: A major fear for renters has been retaliatory eviction – e.g. being kicked out without reason after requesting repairs or attempting to negotiate. Several states have moved to abolish “no fault” evictions in periodic tenancies. NSW’s 2024 reforms ban no-ground evictions, instead requiring a specific reason (like sale of property or owner moving in) to end a lease. South Australia’s reforms in 2024 similarly prohibit ending tenancies without a valid cause, and the ACT and Victoria already had such provisions. Queensland also removed “without grounds” notices for ongoing periodi