Rental Vacancy Climbs to 2.0% as Yields Reach Their Highest Since 2019

After years of record-tight conditions, Australia's rental market is showing signs of easing. Cotality's October Home Value Index reports that the national rental vacancy rate reached 2.0 per cent in September, up from a record low of 1.5 per cent in February 2026 and the highest since January 2025. It remains well below the pre-COVID decade average of 3.3 per cent.

Where vacancy is rising

Hobart has the highest capital-city vacancy rate at 3.0 per cent, followed by Sydney at 2.3 per cent and Brisbane and Perth at 2.1 per cent. Adelaide remains the tightest capital, with a vacancy rate of just 1.4 per cent.

Cotality notes the rise in vacancy has occurred despite a sharp pullback in investor activity. It suggests renters are forming larger households to cope with stretched affordability, after weekly rents rose by about $200 nationally over the past five years.

Rents still rising, but more slowly

Rents are still climbing, but at a slower pace. National rents rose 0.3 per cent in September in seasonally adjusted terms, the smallest monthly rise since May 2025, taking annual growth to 5.5 per cent.

With rents rising while values fall, gross rental yields are recovering. The national gross yield rose to 3.85 per cent, the highest since August 2019. Across the capitals, yields range from 3.4 per cent in Sydney to 6.5 per cent in Darwin. Cotality cautions that neutral or positive cash flow remains hard to achieve, given high holding costs including interest, insurance, maintenance and strata levies.

What it means for owners

For landlords, a modestly softer market rewards well-presented homes, responsive management and rents set to current evidence rather than last year's peak. Shorter vacancies between tenancies often matter more to annual returns than the last $10 a week. For tenants, more listings and slightly longer advertising periods mean more room to compare.