Australia's Rental Market Is Nowhere Near Recovery

The most sobering demonstration of the national shortage of rental properties, which is creating constant upward pressure on rents, is the SQM Research chart showing that rental vacancies nationally have not been as high as 3% at any time in the past 20 years.

The real estate industry benchmark for a balanced rental market is 3%.

If vacancies are around that level, there's a good supply of rental homes for tenants to consider and rents are likely to be stable.

Now, if vacancies are a little bit higher at 4 or 5%, rents are likely to fall.

But if they're consistently below 3%, rents will almost certainly rise.

Now, the data from SQM Research tells us that Australia has not had a balanced rental market for over two decades.

The SQM Research also tells us that there were times during the period from 2016 to 2018, and again briefly during those COVID restrictions periods, when Australia had more than 80,000 rental homes available.

But since then, the supply of available rentals has halved, while the national population has grown significantly by four million extra people in the past 10 years.

Now, right throughout the past four years, there's been fewer than 40,000 rental dwellings available, and that's half those highest levels of the past 20 years.

The national vacancy rate has been below 1.6% for the past four years, the time period in which Anthony Albanese has been Prime Minister.

And currently, according to SQM Research, the national vacancy rate is 1.3%.

Four years in power and Albanese and his rebel of ministers have not been able to deliver a policy that improves life for the more than three million Australian households that rent.

And in May 2026, the federal government delivered a budget which made the rental situation considerably worse.

In the three months since then, there's been significant evidence of tenants' costs going through the rental roof.