The housing market has been tight for would-be homeowners for a number of years now.

It now appears as though the rental market is being squeezed as well due to inflation. But just how much are rents in Australia’s capital cities increasing and what can you do about it?

SQM Research released research earlier this month that showed that national residential property rental vacancy rates fell to 1% in March 2022, down from 1.2% in February 2022. This amounts to half the number of vacancies reported 12 months ago and the lowest national vacancy rate since 2006.

The total number of residential properties available across the country is 36,868, down from 43,844 in February.

Vacancy rates in Sydney, Melbourne and Brisbane dropped down to 1.6%, 1.9% and 0.7% respectively, from 2%, 2.3% and 0.9%.

The smaller capital cities, Adelaide, Canberra, Darwin, Hobart and Perth had vacancy rates well below 1%.

Lower vacancies have led to an increase in asking rents with capital city asking rents rising 2.2% over the last month, bringing the 12-month rise to 11.8%.

Rents for houses have risen 14.7% over the last 12 months whereas unit rents have increased by 11.2%.

Managing director of SQM Research says: The rental crisis has deepened with rental vacancy rates across the country falling to just 1%. As a result, market rents have exploded. Some of our capital cities and regions are recording asking rental increases in excess of 15% over the past 12 months.

According to Domain, weekly median house rents in Sydney are up 9.1% to $600, Melbourne is up 3.4% to $450, Brisbane has risen 14.9% to $465, Perth’s risen 11.6% to $480, Canberra is up 16.7% to $700, Darwin is up 10.9% to $610, Hobart is up 8.3% to $520 and Adelaide is up 9.4% to $465.

Domain’s chief of economics and research Dr Nicola Powell said that tight vacancy rates meant that renters had fewer choices due to record high rents in a number of cities.

She said: “Renters are finding themselves in a heated market with shrinking supply.”

Sydney’s midpoint houses experienced the sharpest increase since 2009, with them increasing 9.1% in the year to March to a median rate of $600 per week.

Ms Powell added: “Sydney’s rental market is swiftly recovering from the pandemic-induced demand shock that spiralled from closed international borders.”

Houses in Sydney’s North Bondi are generally available for rent for $1,400 a week, up 3.7% from the same time last year.

Prices in Turramurra on Sydney’s Upper North Shore surged 23.6% to $1,125 per week.

Even the upmarket suburb of Vaucluse in the eastern suburbs experienced massive growth of 38.8% with the median rent $2,775.

Brisbane recorded the highest rental increase, with asking rents jumping 15.2%.

Brisbane’s upmarket suburb of Hendra saw house rents jump 14.8% to $700.

Adelaide’s southern suburb, Aberfoyle Park rose 20% to $340.

Adelaide was the most competitive capital city rental market, with Domain saying in a statement: “It has been the combination of a steady flow of interstate movers, escalating purchase pressures keeping tenants renting for longer, returning ex-pats and not enough investment activity.”

The Canberra suburb of Yarralumla saw rents increase 37.5% in the last year to $1,100 per week.

Houses in Perth’s beachside suburb of Cottesloe rose 11.7% taking the median price to $1,000; while at the other end of the market, Kelmscott had a 20.7% increase to $350.

Fannie Bay in Darwin increased 26.3% to $720 per week.

Unlike other capital cities, Darwin’s apartments had a double-digit increase of 16.3% to $500, making it comparative to Sydney for unit rentals and cheaper than Canberra’s $540 for units.

Some suburbs in Melbourne saw rents fall quite sharply but overall, which may have contributed to Melbourne’s growth being the slowest across the country at 3.4%.

Rents in Aberfeldie near Essendon in the city’s northwest, fell 7.5% to $588.

The median weekly rent across all Australian capital cities is now $508, which follows the fastest national increase in 13 years.

Regional towns were not immune to price increases either, with Port Macquarie house prices increasing 22.2% to $550.

The Northern Territory regional city of Palmerston saw rents rise 27.1% to $540 per week.

Rents in Tasmania’s East Devonport increased 17.2% to $340.

Overall, houses in the regions increased by 12.9% to $471 in the last year.

So what can you do if your rent is going to increase?

Before you sign a new lease agreement, determine whether or not you have been given enough notice.

CEO of, Greg Bader says: “Rent increases are a common scenario for renters and it’s often difficult to know whether an increase is reasonable or how to respond. If you’ve signed a fixed-term lease (6 or 12 months, for example), your landlord generally can’t increase your rent until that agreement expires. Renting on a periodic lease is a little different – the rent can be bumped, but you need to be given adequate notice.”

He notes that rents across Australia are climbing and many areas have vacancy rates of just above zero.

Negotiate with your landlord or agent

If you do not think any increase is justified then Mr Bader advises: “The first step should always be an upfront discussion with your landlord. You may find it’s more effective to contact them and provide examples of other properties that have been advertised recently and how they compare to your property.

“This may be a better approach than asking for a reduction or for them to maintain your current rent. Consider signing a fixed-term lease to give your landlord some security. If in doubt, remember that rent negotiations happen all the time. Arm yourself with facts and knowledge and prepare for a friendly, open discussion with your landlord.”

Mr Bader says that before you attempt to negotiate you should think about the market you’re living in and consider whether it’s best for you.

He says that if the market is tight and you go too hardball the landlord might be able to re-lease your home at the increased rate within a number of weeks.

If the landlord plans to increase the rent you should think about asking for a longer, more secure fixed-term lease so you can have some security.

Mr Bader adds: “If they’re willing to offer a longer lease, they may be willing to compromise on other lease terms like opportunities to improve or modify the space. As a renter, you’ll get added certainty of no more unexpected increases, stability and in some cases more flexibility.”

Review your budget

Look at your budget to determine whether or not you can afford the rental increase. Generally speaking, no more than 30% of your income should be spent on your rent.

If you can’t afford the rental increase see if you can add value to your landlord in other ways. If you are a good tenant you could see if you can sign a longer fixed-term lease to give your landlord certainty.

If the negotiations break down and you can’t afford the increase you might need to move.

Some renters may decide to move to a new property instead of accepting the rental increase, but with prices in capital cities expected to rise, you could find yourself having to move to a different suburb. You’ll need to weigh up the advantages and disadvantages of moving to a different area. Whilst you may pay less for rent, you could spend more time and money on travel which would negate the lower rent.

If you don’t want to move you could consider other options such as increasing your income by taking on a second job, working additional hours or seeing if there is any room in your budget to make cuts.

Increase your income

Money mentor, Adele Martin says: “You should look at how you can increase your income – is it time you asked for a pay rise or career progression? Can you start a side hustle (Pawshake, Airtasker, The Volte etc?”

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