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Latest insights into the rental market

Insights into the rental market based on a large dataset used to measure Rents in the Consumer Price Index (CPI)

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Released
28/05/2025
Source
Monthly Consumer Price Index Indicator, April 2025
Consumer Price Index, Australia, March Quarter 2025
Released
28/05/2025 11:30am AEST

Introduction

From July 2022, the ABS has used a large dataset, including around 480,000 rental properties, to measure the private rents component of the quarterly CPI and monthly CPI indicator. More information can be found in Measuring Rents in the CPI article.  

This article presents insights into the private Australian rental market, including information about rental market characteristics, how rents are changing depending on their distance from a capital city central business district (CBD), and the distribution of rent changes for properties with new and existing tenants. 

Inflation rates presented in this article for capital cities differ to those published in the CPI. This article excludes both rent assistance and rents paid for government-provided dwellings. In contrast, the CPI includes prices for both privately owned and government-provided rental dwellings and accounts for rent assistance in the private rental market. 

Rental market characteristics

Median rents remain higher than pre-COVID levels

Looking at the period since 2018, median rents in all states and territories began increasing more strongly in 2021 and continued to increase between 2021 and 2024. However, since around late-2024 the pace of growth in median rents has slowed across most states and territories. This is consistent with increases in rental vacancy rates across the country. 

Over the six years since April 2019, Western Australia has seen the strongest growth in median rents of any of the states and territories (75 per cent increase from $350 to $613 per week). Six years ago, median rents in NSW and the ACT were the highest of all ($480 per week) with NSW remaining the highest in April 2025 ($650 per week). Median rents in Tasmania were the lowest of all states and territories for both time periods ($270 and $430 per week). 

National rental market turnover remains stable

Each month, around 2-3 per cent of properties have a change in tenant. This turnover is similar across the states and territories and has been broadly stable over the past five years or so. Seasonal spikes in this turnover can be seen around the start of the calendar and financial years, reflecting common rental changeover periods. 

Quantifying the proportion of properties that have a change in tenant is useful as it helps to explain the divergence between advertised rents and CPI rents. The CPI measures changes in the actual rental prices being paid by new and existing tenants. Measures of rental inflation that are based on newly advertised rental properties only measure changes in the asking or advertised price of rental properties for new tenancies. 

Regional versus capital city rents

Capital city rental inflation higher than in regional areas since 2023 but growth has been slowing

Rents in the capital cities fell throughout most of 2020 and 2021 reflecting weak rental demand combined with increased supply of rental dwellings. This was due to several COVID-19 related factors such as international border closures, freezes on rent increases, one-off rent reductions and an increase in rental stock with some short-term holiday rental accommodation moving into the long-term market.

Over this same period, regional areas saw stable rental inflation until late 2020 when rental inflation started to pick up, driven by positive net population inflows and lower vacancy rates. 

From mid-2021, annual rental inflation picked up in the capital cities and continued to accelerate through to December 2023 when it peaked at 8.5 per cent. Since mid-2024, capital city rental inflation has remained relatively high, although it has steadily moderated to around 5.5 per cent in April 2025.

*Total private dwellings excluding rent assistance. Stratified by SA3 and property type. 

The increase in capital city rental inflation from mid-2021 was particularly evident in inner-city suburbs less than 12.5km from the CBD that previously experienced the sharpest declines in rental inflation between 2020 and 2021. 

The moderation in capital city rental inflation from mid-2024 was also most pronounced in inner-city suburbs less than 12.5km from the CBD and reflects recent increases in vacancy rates. 

Rental inflation for areas further from the CBD has also been gradually moderating since 2023, but at a relatively slower pace. Regional areas between 75 and 100km from the CBD, which saw the highest peak in rental inflation for areas further from the CBD, have seen the sharpest moderation in rental inflation. Regional areas more than 500km from the CBD have experienced the most stable rental inflation since 2023. 

*Total private dwellings excluding rent assistance. Stratified by SA3 and property type. 

Rent price indices show that the overall increase in rents since 2018 remains lower in capital cities than in regional areas. 

*Total private dwellings excluding rent assistance. Stratified by SA3 and property type. 

Rents by distance to CBD for select capital cities

Rent increases in Melbourne inner-city suburbs remain less than in suburbs further from the CBD

Rents for inner-city suburbs in Sydney and Melbourne saw sharp declines over the pandemic period, particularly in Melbourne where inner-city suburbs were more severely impacted by COVID-19 lockdowns and travel restrictions resulting in higher vacancy rates and sharper declines in rent. 

Rental inflation for the inner-city suburbs of Sydney and Melbourne picked up from late 2021. In Sydney, rents in the inner-city suburbs are now rising faster than in suburbs further away from the CBD. In Melbourne, the overall increase in rents in inner-city suburbs since before the pandemic remains lower than in suburbs further from the Melbourne CBD. 

Rent Price Indices*, by capital city SA3, March 2020 = 100

Rent price indices, by capital city SA3

A two panel line graph of rent price indices by SA3 in greater Sydney and greater Melbourne with the index equal to 100 in March 2020. The X-axis represents the month, ranging from June 2018 to April 2025. The Y-axis represents the level of the index. Each line is coloured according to the distance of that SA3 from the CBD, warmer colours (like red) mean that the SA3 is further from the CBD, while cooler colours (like purple) mean that the SA3 is close to the CBD (ranging from 0 to 80km). The graph shows that, in general, rent prices in SA3s close to the CBD declined further after the onset of the pandemic and remained lower for longer, however these SA3s are now above their pre pandemic levels. By contrast, rent prices in SA3s far from the CBD increased over the pandemic and continue to remain above pre pandemic levels. 

Distribution of rent changes

Share of properties with an annual rent increase remains high

Rent increases have become larger and more common for most properties compared to the pre-pandemic period regardless of whether properties have a new tenant or not. 

Since mid-2022, rents for almost all properties (80-95 per cent) with new tenants were higher than the rents charged to the previous tenants. The share of properties with an annual rent increase for properties with a new tenant peaked in February 2023 at 94 per cent and has since fallen to 83 per cent in April 2025. 

The share of properties with an existing tenant that experienced an annual rent increase has remained lower than for properties with new tenants. The share of properties with an annual rent increase peaked later for existing tenants, in November 2023, at a lower share of about 82 per cent. 

The share of properties with an annual rent increase for properties with a new tenant and those with an existing tenant have started to decline from mid-2024. As a result, the share of properties with an annual rent decrease or no change in rent has increased over the same period. 

*Expenditure weighted. Private rents only, excluding rent assistance.

*Expenditure weighted. Private rents only, excluding rent assistance.

Share of properties with larger rent increases has started to decline

Following the COVID-19 pandemic, the distribution of rent changes shifted, with larger annual rent increases becoming more common whether tenants were new or existing. 

Annual rent increases for properties with a new tenant have tended to be larger, on average, than for properties with an existing tenant. Over 70 per cent of properties with a new tenant had a rent increase greater than 10 per cent for the 12 months to June 2023, compared to only 30 per cent of properties with an existing tenant. 

From around March 2024, this shift in the distribution of rent changes towards larger annual rent increases started to reverse, with lower annual rent increases (as well as annual rent decreases and no change in rents) starting to pick up from early to mid-2024 and account for a greater proportion of rent changes. 

In April 2025, around 43 per cent of properties with a new tenant had an annual rent increase less than 10 per cent, and around 10 per cent had no change in rent. This compares to around 20 per cent of properties with an annual rent increase less than 10 per cent and 5 per cent with no change in rents for the 12 months to February 2024. 

For properties with an existing tenant, around 48 per cent had an annual rent increase less than 10 per cent, and around 25 per cent had no change in rent for the 12 months to April 2025. This compares to around 40 per cent with a rent increase less than 10 per cent and 17 per cent with no change in rents for the 12 months to February 2024. 

*Expenditure weighted. Private rents only, excluding rent assistance. It should be noted that distribution presented in this graph uses different methodology and sampling to the CPI. 

*Expenditure weighted. Private rents only, excluding rent assistance. It should be noted that distribution presented in this graph uses different methodology and sampling to the CPI.