Aussie renters need to find extra $1560 per year as prices hit new high, ‘supply and demand’ imbalance blamed   
Australian renters will need to stump up more than $1000 per year as weekly rent levels hit a new high – with one simple reason explaining the imbalance.


News.com.au
January 20, 2026

Renters across the country will remain under financial pressure for years to come as Australia fails to build enough new houses.

Nationally, the median weekly rent lifted 1.6 per cent over the December 2025 quarter to sit at a new high of $650 per week.

Australian renters on average need to find an extra $1,560 per year.

REA Group senior economist Anne Flaherty says Australia’s rising rents are simply a “supply and demand imbalance”.

“We have seen population growth across the country which means more demand for housing and if we look at what is driving population growth it is primarily overseas migration,” she told NewsWire.

“When people first come to Australia they are more likely to rent than own.”

Australia’s rental market remains under pressure due to a lack of housing supply.

Ms Flaherty bluntly warns the housing affordability constraint is likely to remain for years to come and grimly points out rental price increases could continue to outpace wage growth.   

“The difficulty is when it comes to housing it is literally a roof over your head and so people will cut back in other areas,” she said.

“There does come a point where people have to adapt and we do see this with things like house sharing or people living with their parents for longer …. or renting in an area that is further away from where they would like to live.”


“Fundamentally, if we look at a market like Sydney, that is a very unaffordable market but we still see rents rise and property values in that market continue to rise.”

Sydney’s median rental asking price continued to climb 1.3 per cent across combined houses and units, an average price of $760 a week.

To rent a house in Sydney will cost $800 a week, on average.


Hobart was the fastest growing capital city with combined dwelling prices surging 4.2 per cent over the last quarter or 9.1 per cent for the year, costing renters $573 a week.

This was followed by Darwin, which was up by 8.3 per cent over the and Perth which rose 7.7 per cent, although cooled in the final quarter.

Combined housing and unit rents are now $650 and $700 per week respectively.

“Perth has seen the fastest population growth in the country of any of the capitals, creating very strong demand for rental properties,” Ms Flaherty said.

“Even though we have seen a real uptick in recent years and investment in the Perth market, which does add to the supply of rental properties.

“It hasn’t kept up with population growth, so there’s a lot of people looking for rentals, the vacancy rate in Perth is very low and that means the competition we are seeing there is seeing some pretty rapid rise in the rates of rent.”

Canberra is one of the few markets where housing supply is keeping up with population growth, with rents only up by 1.6 per cent over the last 12-months, to be the slowest growing capital city.

The housing shortage is across almost every market in Australia.

For houses, Melbourne was the only market to record a decline in rents over the year, dropping 0.9 per cent compared to December 2024.

Prices for units however rose 4.5 per cent over the 12-months, with either a house or unit in Melbourne now setting renters back $575 a week.

Compared to Melbourne, Sydney renters are typically paying an extra $9,620 per year.

However, Ms Flaherty warned the more affordable rents in Melbourne could be short lived.

“In the lead up to the pandemic and up until quite recently, a lot of new property was developed in Melbourne and that meant (the city) could absorb that population growth.

“During the pandemic we saw the population of Victoria shrink, but now Melbourne is the fastest growing capital behind Perth and is forecast to become the fastest growing again within the next decade.

“We are in a period where a lot of that extra supply is still being absorbed.”

Ms Flaherty also said the affordability of property prices -relative to Sydney- also meant renters are more likely to become homeowners.

“If we look where salaries are sitting and where home values are sitting it is certainly the most affordable capital,” she said.

Yes we need to build lots and lots of new houses.  Also make sure a lot of them are put aside for social housing as well.   

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All of the Labor party laws to "protect" renters won't fix that. They will only make it worse. The harder you make it to get rid of bad tenants, the harder it will be to find and afford a rental place.

Captain Nemo wrote on Jan 20^th, 2026 at 10:23am:


No, it is wrong to claim that ONLY immigration is responsible for the housing and rental crisis. Yes, it is part of the problem, but it is not the sole cause. The problem is supply, not demand. Both councils and state governments have been too slow to release new land for housing developments, and in addition to that, development applications at councils are taking far too long. Then there is the problem of cost - some costs are duplicated between state and council levels. Indeed, some were supposed to be abolished altogether when the GST was introduced. Stamp duty is one such example. This adds tens of thousands of dollars to the cost of building a new home.

So as a consequence of these factors, people are leaning more toward buying established houses rather than building. The result of this is building companies going bust due to lack of work and rising costs. It really is the perfect storm. If the governments at state and federal level and local councils want to address the housing crisis properly, the solution has to be coordinated with less taxes and fees, more land made available for housing developments and changes made to renting particularly with regard to landlords. The lack of land availability is of particular concern as demand is outstripping supply by a wide margin. I know of many who have sold their investment property (or properties) because of uncertainty over taxes and changes in tenancy laws that make it nigh on impossible to remove tenants who are either not paying their rent or causing damage or neglect (or both) to their property(ies). Who in their right mind could blame them for selling?

freediver wrote on Jan 20^th, 2026 at 8:02am:


There should be a law preventing property hoarders who rent out their investments to kick their tenants out on the street just because they decide they want to make a quick buck flipping their joints unless they can prove the tenants are problematic or they can prove financial hardship. If they want to benefit from certain privileged tax concessions, then they need to reciprocate with a moral obligation towards tenants otherwise, it's very one sided

Leroy wrote on Jan 20^th, 2026 at 6:24pm:



You'd rent it out for $500 per week.

BTW - in Victoria you'd have to pay the new landlord's land tax too.   

Sir lastnail wrote on Jan 20^th, 2026 at 5:50pm:


What about a law preventing dribbling loonies?

Bobby. wrote on Jan 20^th, 2026 at 7:01pm:


Don’t forget landlords insurance. It costs an arm and a leg in Melbourne.