SQM August 2026 Vacancy Rate: 1.3% Holds as Sydney and Canberra Loosen and Asking Rents Stall

Published 19 September 2026 · Data cut-off: SQM vacancy for August 2026 (released 15 September 2026); advertised rents for the 30 days to the week ending 4 September 2026. Forecasts quoted are as at 18 September 2026.

What Changed From July to August

Source: SQM Research, National Vacancy Rates, August 2026 (released 15 September 2026) and August 2025 (released 16 September 2025). Percentage-point changes are our arithmetic on SQM's published rates. Year-on-year vacancy-count changes are SQM's where quoted (Sydney, Canberra, Brisbane, Perth, Adelaide, Darwin) and ours from the two releases for Melbourne and Hobart. Darwin's stock is very small and monthly moves should be read with caution, per SQM.

The cycle low was 1.0% in March 2026 (31,732 vacancies). April's rise to 1.2% was the turning point, June confirmed the easing, and July showed the map splitting in two. On the headline, the national rate is where it sat in June 2025. On the count, the market has added about 3,300 vacant dwellings in a year, and the change is in where those dwellings are.

The Two Directions in the August 2026 Vacancy Data

What SQM reports. Sydney's vacancy rate held at 1.7% (1.4% a year ago) with the largest annual rise in available stock of any capital. Canberra rose to 2.1% from 1.8% and now has the highest vacancy rate of any capital. Melbourne rose to 1.8%, unchanged from a year ago. Brisbane (0.9%), Perth (0.6%), Adelaide (0.6%) and Darwin (0.4%) all have fewer vacancies than last August; SQM notes Perth “has tightened further over the year, with no sign yet of relief for tenants.” Hobart is unchanged at 0.6%, up from 0.5% a year ago.

Set against Cotality's price data.

Source: SQM Research, August 2026; Cotality Home Value Index, August 2026 (index results as at 31 August, released 1 September 2026). Our pairing of the two datasets; neither provider publishes this comparison, and it is descriptive, not a modelled relationship.

Our interpretation. The alignment between rising vacancy and deeper price falls in Sydney and Canberra is consistent with several mechanisms, none of which the data isolates. One possible contributor is increased turnover of properties between the sale and rental markets: Cotality's September chart pack has Sydney new listings 18.8% below a year ago but total listings 11.3% higher, which is stock not clearing, and some unsold properties are re-let or sit vacant while vendors wait. Another is a thinner investor bid: Cotality estimates Sydney sales are down more than a fifth on a year ago, and ABS Lending Indicators show investor loan commitments fell 8.6% by number and 10.2% by value in the June quarter (quarterly changes, not annual). A third is simply that rents in the expensive capitals had reached what tenants could pay, which the next section takes up. What the data does not show is who is doing the selling or letting, so we do not describe investors as the marginal sellers.

Melbourne only half fits the pattern. Its values are 6.8% below the March 2022 record and 4.7% lower over the year, yet its vacant stock is flat on a year ago and its August move (1.7% to 1.8%) is a fifth of Canberra's annual move and a third of Canberra's August move. Melbourne entered this downturn with the loosest vacancy of the large capitals; investor exits under Victoria's land-tax settings are a commonly offered explanation for a thinner rental stock, and one this data cannot test. It is the capital where the vacancy map and the price map only half agree, which is why it sits in our Melbourne signals framework as a market to watch.

Asking Rents: Flat for the Month, and the Annual Figure Is “History”

Source: SQM Research, advertised (asking) rents on new listings, 30 days to the week ending 4 September 2026, released 15 September 2026. Capital-city average $793.76.

The annual figure will fall even if rents stay flat, because a 12-month change compares this month's level with the level a year earlier. The strong monthly rises of late 2025 are still inside that window; as each is replaced by a flat or negative month, the annual comparison shrinks. SQM's own expectation is that national annual growth slows to the mid-single digits by December “even with a normal seasonal firming.”

Sydney has turned, on SQM's reading, and Canberra looks to have as well. Sydney's combined rent is down 0.6% for the month, annual growth has slowed to 5.4%, and SQM calls it “the clearest case of a capital city rental market that has turned,” expecting Sydney house rents to be the first series to record annual growth below 3%. Canberra combines the highest vacancy in the country with 3.3% annual rent growth and a 3.2% monthly fall in house rents. At the other end, Perth and Brisbane houses are growing at 9.5% and 9.0% with “no sign of moderation in Perth,” and Hobart's 10.4% is the strongest capital figure, driven by units. Adelaide remains the outlier, as tight as Perth at 0.6% vacancy but with 3.4% annual rent growth.

Three rent measures, three answers

Source: SQM Research (15 September 2026); Cotality Monthly Housing Chart Pack, September 2026, and Home Value Index, August 2026; ABS Monthly CPI Indicator, July 2026, as analysed in our July CPI note.

The leading series (asking rents) has gone flat while the stock series (Cotality) still rose 0.4% in the month and long before the lagging series (CPI) will slow. That is the order you would expect near a turning point, and it means CPI rents will continue to reflect earlier increases for some time as existing leases reset, a lag rather than a forecast.

Seasonality: Why Spring Is the Test

SQM's published expectations for the run into summer, from the 15 September release:

• National vacancy towards 1.4% to 1.5% by December on the usual seasonal rise in listings; Sydney at or above 1.9%.
• Rents in Brisbane, Perth and Adelaide “still have room to firm”; Sydney, Melbourne and Canberra “do not.”
• Sydney house rents to be the first capital series below 3% annual growth.
• National annual rental growth in the mid-single digits by year-end.

Our interpretation, framed as three scenarios rather than a forecast:

Our scenario framing on SQM's published expectations. Qualitative, not modelled.

One contributing explanation for the Sydney and Canberra stall is affordability. Wages grew 3.2% over the year to June 2026 (ABS Wage Price Index, released 19 August; private sector 3.1%), against asking rents at 7.3% and stock rents at 5.7%. Sydney's median house asking rent of $1,128.83 a week is about $58,700 a year. Tenant incomes are one constraint among several (household formation, migration, rental supply, dwelling mix and local employment all move rents), so the data supports affordability as a contributor to the slowdown rather than as its demonstrated cause. Brisbane at $756 and Perth at $802 a week have more headroom on that measure, and Adelaide's subdued 3.4% growth at 0.6% vacancy suggests its ceiling is lower still.

Supply and Demand: The Fundamentals Versus the Cycle

• Population. Australia had 27,921,150 people at 31 March 2026, up 1.4% over the year. Net overseas migration has eased to 292,100 from 309,500. Every state and territory grew.
• Approvals. July's 17,687 dwelling approvals (seasonally adjusted, ABS, released 1 September; private-sector houses −4.2%) annualise to about 212,000 on a simple run-rate; the monthly fall follows a stronger first half and approvals remain above their level a year earlier on Cotality's reading of the ABS series. The National Housing Accord target of 1.2 million homes over five years from July 2024 implies about 240,000 a year; approvals are not an official target and lead completions by one to two years or more.
• Investor finance. Investor loan commitments fell 8.6% in number and 10.2% in value in the June quarter (ABS Lending Indicators, released 14 August), the largest quarterly fall since September 2022, analysed in our lending note.
• Listings and yields. Cotality's September chart pack has national total listings at 139,167 in the four weeks to 6 September, 18.1% above a year ago and 2.2% above the five-year average, with new listings 3.1% below last year. Gross rental yields have risen to 3.8% nationally and 3.6% across the combined capitals, the highest since 2019 on Cotality's series. In August the expansion came mostly from the price side, with Cotality values down 0.9% against its rent index up 0.4%, which we treat as a different thing from rising rents: a higher gross yield produced by a falling price is a capital loss for an existing owner and a lower entry price for a buyer, and says nothing on its own about total return or cash flow. The mechanics are in Rental Yields Are Rising as House Prices Fall.

What It Means for Investors

Illustrative underwriting scenarios, not predictions. One month of flat advertised rents does not justify a single mandatory assumption, so the useful exercise is a sensitivity range.

Our illustrative scenarios for stress-testing a purchase, September 2026. They are ranges designed to be conservative against SQM's current expectations, not forecasts of rent or vacancy.

Two further observations from the data. First, in the tight capitals the risk is paying for rent growth that is already slowing. Perth and Brisbane houses at 9% to 9.5% are the strongest series in the country, but Cotality's stock measure for the same cities is 8.0% and 6.4% and wages are 3.2%. Nothing in this release argues for acting before the October print: SQM's September data and the first spring rent read arrive within four weeks. Second, Adelaide's 0.6% vacancy has not translated into rent growth (3.4%); the SQM data establishes a tight, subdued rental market there, and any investment case for Adelaide has to come from other evidence, as it does in the Top 10 Suburbs screens.

What to Watch

• RBA Board, 28 to 29 September. As at 13 September, NAB forecast a 25 basis point increase to 4.60% at this meeting; CBA, ANZ and Westpac (which changed its call on 11 September) forecast the same increase in November. A higher cash rate raises investors' holding costs at the moment rent growth has stalled in the expensive capitals, and would be likely to slow buyer demand further.
• ABS monthly CPI, August (about 30 September). The CPI rents component covers all existing leases and lags asking rents. Its reading will reflect earlier increases for some time, which our July CPI note identified as one reason underlying inflation has been slow to fall; it is a different measure from the SQM series and should not be read as the same thing.
• Cotality Home Value Index, September (1 October). A sixth monthly fall would keep the price side of the yield equation moving. The August falls in Brisbane, Perth and Adelaide were 0.8% to 1.0%; those are the markets where rents are still rising.
• SQM September vacancy (mid-October). The first spring print and the first full post-commencement month for the LRBA changes. National at or above 1.4% and Sydney above 1.8% would put SQM's December path on track.
• October to January. The leasing season. SQM's condition for the larger capitals is explicit.

Methodology and Limitations

SQM's vacancy rate counts online rental listings advertised for three weeks or more against the total number of established rental properties, a listings-based measure with data from 2005. Advertised rents are asking prices on new listings over a rolling 30 days to the week ending 4 September 2026 and lead rents actually paid. Darwin (94 vacancies) and Hobart (158) have very small stocks and volatile monthly moves. Figures are subject to minor revision. The pairing of SQM vacancy with Cotality price data is ours and descriptive. The scenarios are qualitative framings of SQM's published expectations. Bank forecasts are as reported at the dates given and will age. Population, wages and approvals are ABS figures from the releases cited, with approvals seasonally adjusted and investor lending expressed as quarterly changes.

The Bottom Line

The August 2026 SQM release shows national advertised rents flat for the month and, in SQM's words, annual increases that “have already stopped.” The national vacancy rate is unchanged at 1.3%, and the two directions beneath it are set out above. The open question for the tight capitals is how long 7% to 10% house-rent growth can run against 3.2% wages.

For investors the data changes the assumptions; the conclusions hold. The income case for the tight, affordable capitals held for another month at a slower growth assumption than the past year would suggest. The cash-flow case for a counter-cyclical purchase in Sydney or Melbourne weakened at the same time as prices fell. Whether August was a winter pause or the end of the upswing in the larger capitals is a question SQM has said the spring leasing season will answer.