Landlords are entering summer with a rental market that remains tight nationwide. Vacancy rates are still near historic lows and tenant demand continues to outpace available supply. At the same time, tenant affordability is under considerable pressure, so pricing decisions require care and a balanced approach. The latest Cotality Housing Value Index provides a clear picture of the conditions shaping the months ahead.
National dwelling values rose 1.0% in November, the third consecutive month of one per cent growth. Brisbane, Adelaide, Perth and Darwin recorded the strongest gains, while Sydney and Melbourne showed much milder rises. These value trends tell us two things. First, population growth and constrained construction are still lifting demand for established housing. Second, the rental market is feeling the flow-on effect through intense competition for well-located homes, especially in cities where listings remain well below average.
Rental conditions remain extremely tight. Vacancy rates have held around 1.5% for four months, down from 1.9% a year ago. National rents lifted a further 0.5% in November and are 5.0% higher over the year. Every capital city has seen increases, with apartments generally recording the strongest annual growth. However, the report also highlights the reality for tenants: the share of income required to rent is now at a record high, sitting at just over one third of pre-tax household income (page 3).
For landlords, this combination of low vacancy and stretched affordability creates a narrow path. Demand is strong, but tenants are increasingly cost-conscious. That means rental adjustments should be gradual, justified, and anchored in market evidence. Over-reaching risks higher turnover, arrears, or vacancy, even in competitive markets.
The value data also shows a widening performance gap between larger cities and mid-sized capitals. Perth, Brisbane and Adelaide continue to grow at faster rates than Sydney and Melbourne, largely due to deeper supply shortages and stronger interstate migration into more affordable cities. These trends signal ongoing rental demand in those markets, but they also highlight the need for careful maintenance planning. Properties in high-growth areas are seeing heavier usage and faster wear, so timely repairs and preventative work are key to preserving value and retaining quality tenants.
Investor activity is rising, particularly in New South Wales, but gross yields are slipping as dwelling values grow faster than rents. National yields now sit at 3.58%, the lowest level in three years. This pressures cash flow but reinforces the importance of good tenant retention. A well-maintained home, fair rent reviews and clear communication can help secure longer tenancies and reduce avoidable costs.
Looking ahead, affordability constraints and steady interest rates may temper value growth through 2026. For landlords, this points to a period where stable occupancy, proactive upkeep and compliance awareness will matter as much as rental income. Regulatory scrutiny of rental standards, rent increases and property safety continues to rise across all states, and responsible management remains essential for long-term performance.
Low vacancy rates and limited new housing mean tenant demand should stay firm next year. The most successful landlords will be the ones who manage their assets with care, stay engaged with market conditions and support tenants through a challenging cost-of-living environment.
Gross rental yields nationally
| Sydney | 3.0% |
| Melbourne | 3.6% |
| Brisbane | 3.4% |
| Adelaide | 3.5% |
| Perth | 3.9% |
| Hobart | 4.3% |
| Darwin | 6.3% |
| Canberra | 4.0% |
| National | 3.6% |
DISCLAIMER
The following advice is of a general nature only and intended as a broad guide. The advice should not be regarded as legal, financial, or real estate advice. You should make your own inquiries and obtain independent professional advice tailored to your specific circumstances before making any legal, financial, or real estate decisions. Click here for full Terms of Use.