Cotality’s latest housing affordability report noted that Australian rental affordability in the September quarter of 2025 was the worst on record, with the median renting household required to spend 33.4% of their incomes to rent the median advertised home:
Cotality’s housing results for January, released on Monday, revealed that rental affordability continues to worsen, with advertised rents accelerating amid tight vacancy rates.
Cotality’s national Rental Index increased by 0.6% in January, the strongest monthly change in rents since April last year.
Similarly, the annual pace of rental growth accelerated to 5.4% over the 12 months to January, adding $35.20 per week to the median rent.
The reacceleration in rents follows a tightening in the national rental vacancy rate to 1.7% in January 2026, down from 2.1% a year earlier and the long-run average of 2.5%.
“Every capital city except Canberra has recorded a vacancy rate below the 10-year average”, noted Cotality.
The past five years have seen advertised rents nationally jump by 42.4%, adding around $10,600 to the annual cost of renting for the median Australian household.
The following chart from Cotality shows that annual rental growth has accelerated across most capital city house and unit markets:
Source: Cotality
The rental situation is unlikely to improve anytime soon given that actual dwelling construction remains near decade-low levels amid still-strong population growth.
Conditions will remain difficult for renters so long as the Albanese government continues to import demand via immigration faster than new housing can be supplied.
The Albanese government should instead emulate Canada’s deep immigration cuts, which have caused advertised rents to decline for 15 consecutive months:
As a result, average asking rents in Canada fell to $2,060 in December, down $142 (6.4%) from the peak to the lowest level in two and a half years:
Canada provides the blueprint of how to fix the rental crisis.
