Australia’s rental market remained under pressure through 2025, with no signs of that changing anytime soon.
National rents rose 5.2% over the year, up from 4.8% in 2024, with low supply continuing to be a key driver, according to Cotality. Rental listings in the December quarter were 11% lower than a year earlier and 17% below the previous five-year average, highlighting just how tight conditions remain.
Over a longer horizon, the change has been striking. Rents are now 42.9% higher than five years ago, compared to growth of just 7.5% in the preceding five-year period. As a result, households are dedicating a record 33.4% of their pre-tax income to rent.
For investors, yields have edged lower. Property prices increased faster than rents in 2025, reducing national gross rental yields from 3.7% to 3.6% over the course of the year. Even so, yields remain well above the pandemic lows seen in late 2021.
The takeaway is that supply constraints are still shaping the rental market, and are likely to do so for the foreseeable future.
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