Rental Market Still Tight Despite Signs of Relief
More rental homes are becoming available in some regions, but record rents and limited supply continue to challenge tenants.
Australia’s rental market is showing early signs of improvement, with more properties becoming available in several regions, but experts warn conditions remain far tighter than before the pandemic and renters should not expect significant relief anytime soon.
New analysis by REA Group’s PropTrack shows the total number of rental listings across Australia in June 2026 was 2.2 per cent higher than a year earlier and 2.6 per cent above the five-year monthly average. While this represents a modest improvement in rental availability, the overall number of homes available remains well below pre-pandemic levels.
Despite the increase in listings, advertised rents continued climbing to record highs during the June quarter, highlighting the ongoing imbalance between supply and demand. Analysts say the recent increase in available rentals has been relatively small and is unlikely to deliver meaningful relief for most tenants.
REA Group Senior Economic Analyst Megan Lieu said rental availability had improved in some parts of the country, but conditions remained exceptionally tight compared with historical levels.
Several factors continue to drive Australia’s rental shortage.
Strong population growth remains one of the biggest contributors. Between mid-2023 and mid-2025, net overseas migration averaged around 425,000 people each year, with many new arrivals entering the rental market first. At the same time, household sizes have gradually become smaller, increasing demand for additional rental properties. Even a modest reduction in average household size has created demand for an estimated 144,000 extra rental homes nationwide.
Housing construction has also struggled to keep pace with demand.
Although building approvals have increased, home completions have generally failed to match population growth across most states, with ongoing labour shortages in the construction industry continuing to limit the supply of new housing.
While the national picture remains challenging, some regions are beginning to see noticeable improvements in rental availability.
The biggest increase was recorded in Far West and Orana in New South Wales, where rental listings were 38 per cent higher than a year earlier. New England and North West NSW followed closely with a 35 per cent increase, alongside Queensland’s Wide Bay region, which also recorded a 35 per cent rise. Victoria’s Hume region experienced a 33 per cent increase, while Launceston and North East Tasmania saw listings climb 24 per cent.
Within the capital cities, several Sydney regions experienced the strongest improvement.
Rental listings increased by 13 per cent in Sydney’s Outer South West and Northern Beaches, while Baulkham Hills and Hawkesbury, Ryde and the Australian Capital Territory all recorded increases of around 12 per cent.
For Northern Rivers renters, the report provides cautious optimism rather than immediate relief.
Although the region was not listed among Australia’s biggest improvers, increased rental availability in neighbouring New England and North West NSW may indicate broader regional supply is beginning to improve. However, the Northern Rivers continues to experience strong population growth, limited new housing supply and ongoing affordability pressures that are likely to keep competition for rental properties high.
Looking ahead, REA Group expects rental demand to remain elevated over the coming decade, with annual population growth forecast to average around 235,000 people.
The Federal Government’s new $2 billion Local Infrastructure Fund, announced in the 2026–27 Budget, is expected to support future housing development. However, analysts caution that increasing housing supply will take time, particularly while labour shortages and higher construction costs continue to constrain building activity.
The report also notes that recent changes to property taxation announced in the Federal Budget may discourage some investors from entering the market, potentially affecting rental supply. At the same time, the policy changes could encourage higher home ownership by reducing competition in the established housing market. The full impact of these reforms is expected to become clearer over the coming months.
For now, Australia’s rental market remains one of tight supply and strong demand. While some regions are offering renters greater choice than a year ago, the broader shortage of housing means affordability and availability are likely to remain major challenges for the foreseeable future.
