Key points
  • Australia's national vacancy rate rose to 1.48% in January, the highest level since February 2022.
  • Despite recent easing, vacancy rate remains 0.85% lower than five years ago. 
  • Melbourne posts the highest vacancy rate among capital cities at 1.81%.
  • Hobart (0.72%), Perth (1.11%), and Brisbane (1.13%) remain the tightest capital city markets. 

The latest Market Insights report published by REA Group shows the national vacancy rate rose by 0.19% in January, marking a three-month run of improving conditions. 

“Conditions for renters have improved over the past three months, though they remain largely unchanged from a year ago,” REA Group senior economist Anne Flaherty said. 

Despite all markets seeing vacancy rates rise, the national vacancy rate is still 0.85% tighter than five years ago when it sat at 2.3%, and still below what's considered a balanced rate. 

A vacancy rate of about 3% is widely regarded as “healthy” or balanced - at this rate, tenants have reasonable choices and landlords can lease properties without long delays. 

Anything under 2% is considered tight. 

Vacancy rate snapshot across capital cities

Hobart recorded the largest monthly rise in vacancy (+0.36%) but remains Australia’s tightest capital with only 0.72% of rentals sitting vacant.

Perth and Brisbane are next tightest at 1.11% and 1.13%, respectively, reflecting persistent undersupply.

Melbourne is the loosest of the capitals at 1.81% (+0.22% in January), followed by Darwin (1.76%) and the ACT (1.59%).

“With the highest vacancy rate of any capital city, renters in Melbourne are facing greater rental availability,” Ms Flaherty said.

Sydney nudged up 0.1% to 1.55%.

Relief for renters stronger outside big cities

Vacancy across the combined capitals ticked up 0.17% to 1.51% in January, sitting just above the 1.4% rate in regional Australia.

On an annual basis, however, renters have seen greater relief in the regions, where vacancy rose 0.21%, compared to only 0.03% in the capitals. 

“Rental supply improved across both capital city and regional markets in January, however there has been greater relief for renters regionally,” Ms Flaherty said.

What it means for renters and landlords

While rent growth has cooled in many markets over the past year, REA Group expects rents to set new records in 2026 amid structurally low vacancy, especially where supply is constrained. 

“Continued low vacancy rates are expected to drive rents to new highs in 2026, particularly in markets where supply is constrained, such as Hobart, Perth, and Brisbane,” Ms Flaherty said.