Rental supply picks up in Sydney, Melbourne

Rental availability

Last week's Building Activity stats from the ABS showed a record 248,000 dwellings under construction as at 30 June 2026, with a spate of unit projects already completing in Sydney.

By the end of September, it was possible to see the impact on rental vacancy rates.

It seems that while the previous building cycle was heavily centralised and focussed on high-rise apartment towers, this cycle is characterised by a more dispersed range of medium- and higher-density development across the capital cities and various regions (Gold Coast, Sunshine Coast, etc). 

Melbourne's rental vacancy rate rose to 1.9 per cent in September, and in Sydney the rental vacancy rate rose to 1.8 per cent.

Canberra had the equal-highest rental vacancy rate at 1.9 per cent, while rental markets remained very tight across the other five capital cities. 

Here is a 6-month moving average chart of the rental vacancy rates across the 8 capital cities:

This should presumably mean softer rental price inflation over the next 6 to 12 months.

That said, capital city median asking rents did still rise to a record high $932/week for houses, while unit rents were also close to a record high at $673/week, according to SQM Research data.

Nationally rents were still 7.6 per cent higher than a year earlier.  

You can read SQM's media release here. 

The medium-term outlook

A few sundry observations, including from last week's Building Activity figures.

While Brisbane currently has a very tight rental market, eventually there will come a surge of project completions right across south-east Queensland, which will soften the rental market.

Sydney and Melbourne already working through their respective supply pipelines, and rental markets will soon be tight again in the eastern suburbs, lower north shore, inner west, etc. 

The leading indicators show that new home sales have fallen every month since the Federal Budget, building approvals have fallen to a 7-month low, and developer insolvencies are tracking at all-time highs. 

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Podcast: Stabilisation or second leg for downturn?

Podcast: Buyer standoff

Here's what Chris B and I discussed on the podcast this week:

"Pete examines how the downturn differs by city and price bracket, with more expensive homes under pressure while affordable parts of the market have held up better. 

Chris explains why a cheaper-looking apartment or a well-known suburb is not enough: building quality, strata costs, location and the individual property still matter. Their views on a possible Melbourne recovery and the outlook for Brisbane and Perth are scenarios, not certainties.

They also tackle a property-market puzzle. 

Some homes have sat unsold for months, yet new listings remain scarce. Does that create genuine bargaining power, or just a standoff between buyers and sellers? Pete and Chris discuss what might turn a slowdown into a buyer’s market, including motivated vendors, interest rates and the supply of desirable homes.

Two listener questions bring the conversation back to decisions families face now: how parents can help a daughter prepare for home ownership, and what an inner-west Sydney buyer should look for when prices soften but stock stays tight. Expect a practical discussion of earning power, money habits, negotiating room and why the market bottom is usually clearest only in hindsight."

Tune in here (or click on the image below):

You can also watch the YouTube version here:

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3 ways to find out more:

1. Download our property buying guide

Download our free property buying guide here. 

You can also check out a few of our recent property purchases here. 

Get in contact with us today if strategic property investment is your thing. 

    2. Subscribe to our Top 10 Podcasts for Investors

Listen in to our podcasts

The Australian Property Podcast is rapidly becoming one of Australia's biggest business podcasts, now with over 50,000 audio downloads per month, and growing fast.

And our popular Low Rates High Returns Show also remains available on Spotify.

    3. Subscribe for my free daily blog

Subscribe for my free daily blog here. 

You can also catch up with me daily on Twitter here, where I'm far too active daily and have over 20,000 followers. 

By the way, I'm an 8-times published author on finance, investing, and business, so you can check out some of my books here. 

My book, co-authored with Cate Bakos is available to buy here or on Amazon here - check out our free Buy Right podcast series here. 

No increase in rents...yet

Still high on supply

Dwelling commencements increased to around 52,000, seasonally adjusted, in the June 2026 quarter.

Completions continue to lag commencements, but did increase to 47,000, as a bunch of unit developments hit the market in Sydney.

The number of houses under construction has increased again to around, the strength over the past three years having been driven by Perth and Brisbane.

As for units and townhouses, there is a record number of units under construction across Greater Brisbane, Gold Coast, Redcliffe, Maroochydore, etc.

And there's still a fair amount of pipeline to be worked off in Sydney and Melbourne.

Thus, although the lead indicators have softened considerably over the past 4 months since the Budget - and we have a record number of developers going into insolvency (especially in Sydney) - it will be some time before we see any meaningful increase in rents. 

Overall, there were some 248,000 dwellings under construction as at June 2026, so it would be reasonable to expect some rental market softness into 2027 as this wave of supply hits the market.

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3 ways to find out more:

1. Download our property buying guide

Download our free property buying guide here. 

You can also check out a few of our recent property purchases here. 

Get in contact with us today if strategic property investment is your thing. 

    2. Subscribe to our Top 10 Podcasts for Investors

Listen in to our podcasts

The Australian Property Podcast is rapidly becoming one of Australia's biggest business podcasts, now with over 50,000 audio downloads per month, and growing fast.

And our popular Low Rates High Returns Show also remains available on Spotify.

    3. Subscribe for my free daily blog

Subscribe for my free daily blog here. 

You can also catch up with me daily on Twitter here, where I'm far too active daily and have over 20,000 followers. 

By the way, I'm an 8-times published author on finance, investing, and business, so you can check out some of my books here. 

My book, co-authored with Cate Bakos is available to buy here or on Amazon here - check out our free Buy Right podcast series here. 

ausbiz: Housing market squeeze

ausbiz TV

I joined Andrew at ausbiz TV to discuss where the housing market is turning down most.

Tune in here (or click on the image below):

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3 ways to find out more:

1. Download our property buying guide

Download our free property buying guide here. 

You can also check out a few of our recent property purchases here. 

Get in contact with us today if strategic property investment is your thing. 

    2. Subscribe to our Top 10 Podcasts for Investors

Listen in to our podcasts

The Australian Property Podcast is rapidly becoming one of Australia's biggest business podcasts, now with over 50,000 audio downloads per month, and growing fast.

And our popular Low Rates High Returns Show also remains available on Spotify.

    3. Subscribe for my free daily blog

Subscribe for my free daily blog here. 

You can also catch up with me daily on Twitter here, where I'm far too active daily and have over 20,000 followers. 

By the way, I'm an 8-times published author on finance, investing, and business, so you can check out some of my books here. 

My book, co-authored with Cate Bakos is available to buy here or on Amazon here - check out our free Buy Right podcast series here. 

Podcast: Are higher rates breaking the property market?

Property Podcast

Here's what we discussed this week:

"Are higher interest rates finally testing the Australian property market—or creating a window for patient buyers?

In this episode of the Australian Property Podcast, Pete Wargent and Chris Bates discuss what rising mortgage costs and stubborn household expenses mean for buyers, borrowers and investors. Recorded ahead of an RBA decision, their conversation examines the prospect of another rate rise rather than assuming its outcome.

They look at why some households cannot refinance despite holding equity, how tighter borrowing capacity is changing the plans of first-home buyers and upgraders, and why a weaker market does not affect every suburb or price point equally. Pete and Chris also explore the pressures facing builders and developers, and the tension between falling prices today and constrained housing supply tomorrow.

Is property still worth investing in during a downturn? They weigh the appeal of well-located, established homes against higher holding costs, uncertain rates and the risk of buying new property on shaky assumptions.

In the listener Q&A, they consider how a property developer approaching retirement might plan a portfolio sell-down, the trade-offs of rentvesting in different markets, and whether a Melbourne homeowner should keep cash in an offset account, buy another home or investigate commercial property. Along the way, they stress the importance of debt, cash flow and property quality over easy predictions".

Tune in here (or click on the image below):

You can also watch the YouTube version here:

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3 ways to find out more:

1. Download our property buying guide

Download our free property buying guide here. 

You can also check out a few of our recent property purchases here. 

Get in contact with us today if strategic property investment is your thing. 

    2. Subscribe to our Top 10 Podcasts for Investors

Listen in to our podcasts

The Australian Property Podcast is rapidly becoming one of Australia's biggest business podcasts, now with over 50,000 audio downloads per month, and growing fast.

And our popular Low Rates High Returns Show also remains available on Spotify.

    3. Subscribe for my free daily blog

Subscribe for my free daily blog here. 

You can also catch up with me daily on Twitter here, where I'm far too active daily and have over 20,000 followers. 

By the way, I'm an 8-times published author on finance, investing, and business, so you can check out some of my books here. 

My book, co-authored with Cate Bakos is available to buy here or on Amazon here - check out our free Buy Right podcast series here. 

Job vacancies fall further; unemployment to rise

Job vacancies fall

Job vacancies fell another -3,000 over the 3 months to August, for a decline of -0.9 per cent, following a -2.2 per cent decline over the preceding quarter.

While the 3 most populous states appear to have stabilised, job vacancies fell in all most of the other states and territories. 

The number of unemployed persons per job vacancy has increased from the pandemic emergency lows of around 1(!) to 2.2.

This is the highest ratio since February 2021, and suggests that monetary policy has been mildly restrictive.

With the size of the labour force continuing to swell quite rapidly, it looks as though the unemployment rate may rise gradually towards 5 per cent, and then above.

Overall, it does look as though the unemployment rate will keep rising from here, with Western Australia and the Northern Territory seeing fewer roles created, and Canberra seeing some cutbacks in hiring too.

---

3 ways to find out more:

1. Download our property buying guide

Download our free property buying guide here. 

You can also check out a few of our recent property purchases here. 

Get in contact with us today if strategic property investment is your thing. 

    2. Subscribe to our Top 10 Podcasts for Investors

Listen in to our podcasts

The Australian Property Podcast is rapidly becoming one of Australia's biggest business podcasts, now with over 50,000 audio downloads per month, and growing fast.

And our popular Low Rates High Returns Show also remains available on Spotify.

    3. Subscribe for my free daily blog

Subscribe for my free daily blog here. 

You can also catch up with me daily on Twitter here, where I'm far too active daily and have over 20,000 followers. 

By the way, I'm an 8-times published author on finance, investing, and business, so you can check out some of my books here. 

My book, co-authored with Cate Bakos is available to buy here or on Amazon here - check out our free Buy Right podcast series here. 

Top end leads housing declines

Prices falls for a 6th month

Cotality reported that housing prices declined -1.1 per cent nationally in September 2026, to be -5.2 per cent below the peak following six monthly declines. 

Source: Cotality

The declines have been driven by Sydney (-8.6 per cent) and Melbourne (-7½ per cent), and more broadly by houses in the most expensive price quartile in the market.

Indeed, given the 5 per cent deposit scheme - and the bottom end of the market being supported by soaring rents and construction costs - there has been no improvement at all in affordability for first homebuyers in the higher mortgage rate environment.

Dr Alex Joiner of IFM Investors charted the data below to demonstrate how price declines have been driven primarily by houses in the most expensive 25 per cent of the market.

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3 ways to find out more:

1. Download our property buying guide

Download our free property buying guide here. 

You can also check out a few of our recent property purchases here. 

Get in contact with us today if strategic property investment is your thing. 

    2. Subscribe to our Top 10 Podcasts for Investors

Listen in to our podcasts

The Australian Property Podcast is rapidly becoming one of Australia's biggest business podcasts, now with over 50,000 audio downloads per month, and growing fast.

And our popular Low Rates High Returns Show also remains available on Spotify.

    3. Subscribe for my free daily blog

Subscribe for my free daily blog here. 

You can also catch up with me daily on Twitter here, where I'm far too active daily and have over 20,000 followers. 

By the way, I'm an 8-times published author on finance, investing, and business, so you can check out some of my books here. 

My book, co-authored with Cate Bakos is available to buy here or on Amazon here - check out our free Buy Right podcast series here. 

Building approvals fall -6pc (more to come)

Building approvals to tank

Attached dwelling approvals dropped significantly by a seasonally adjusted -21.2 per cent in August, to 5,670.

South-east Queensland has been pumping the numbers for attached building approvals over the past couple of years, but reportedly pre-sales have fallen away sharply since the May Federal Budget.

House approvals have also been solid in Perth and Brisbane of late, taking total house approvals up to a 5-year high of around 10,890 for the private sector in the month of August.

Again, however, since the Federal Budget enquiry for new homes has tanked, and this will likely flow through to approvals data over the next year or two.

Overall, there were around 16,950 dwellings approved in August, seasonally adjusted, for a decline of -6.1 per cent. 

Approvals had been picking up, but now higher interest rates and build costs are bringing the cycle to an end. 

Over the year, around 207,000 dwellings were approved.

Nobody really talks about the 1.2 million new homes target any more - clearly we won't get anywhere close to that - especially given the recent surge in developer insolvencies.

Indeed, not all dwellings approved will actually be built.

Finally, the monthly figure for non-residential building work approved is extremely noisy and lumpy as data centres are approved, and it fell by -45 per cent in August...the trend has been higher, though, as more data centres are to be built in Sydney, Melbourne, and it appears Queensland. 

Overall, building approvals figures have been solid until now, but are softening in real time, and are widely expected to drop away over the next 12 months.

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3 ways to find out more:

1. Download our property buying guide

Download our free property buying guide here. 

You can also check out a few of our recent property purchases here. 

Get in contact with us today if strategic property investment is your thing. 

    2. Subscribe to our Top 10 Podcasts for Investors

Listen in to our podcasts

The Australian Property Podcast is rapidly becoming one of Australia's biggest business podcasts, now with over 50,000 audio downloads per month, and growing fast.

And our popular Low Rates High Returns Show also remains available on Spotify.

    3. Subscribe for my free daily blog

Subscribe for my free daily blog here. 

You can also catch up with me daily on Twitter here, where I'm far too active daily and have over 20,000 followers. 

By the way, I'm an 8-times published author on finance, investing, and business, so you can check out some of my books here. 

My book, co-authored with Cate Bakos is available to buy here or on Amazon here - check out our free Buy Right podcast series here.