SQM National Vacancy July 2026: 1.3% Holds — and the Rental Map Splits in Two
The national vacancy rate held at 1.3% in July, but the detail reads like the price map: Sydney, Melbourne and Canberra are easing while Adelaide tightened to 0.6% and five capitals sit below 1%. Asking rents are 7.2% higher year-on-year, with units outrunning houses. Short-form investor analysis of the 13 August release.
This is one edition in a monthly series. The latest national and city vacancy figures are always on the Vacancy Rate Tracker →
Direct answer
Australia's national residential vacancy rate held at 1.3% in July 2026, unchanged from June, on SQM Research data released 13 August. Beneath the flat headline, the market split: vacancy is easing in the capitals where prices are falling (Sydney and Melbourne both rose to 1.7%, Canberra to 1.8% — now the loosest capital) and holding at extreme lows in the capitals where prices have held (Adelaide tightened to 0.6%; Perth 0.6%, Hobart 0.6%, Brisbane 0.9%, Darwin 0.3%). National asking rents are 7.2% higher than a year ago, with unit rents (+7.7%) outrunning houses (+6.8%). For investors, the vacancy map now tracks the price map — and both point to the same affordable, tight-vacancy corridors.
This is a short-form, same-day read of the 13 August release; the monthly deep-dive treatment stays with our regular research slots. Everything here is from SQM's July 2026 National Vacancy Rates bulletin unless attributed otherwise.
1. The National Picture: Stable Headline, Rising Vacancy Count
Direct answer
The vacancy rate held at 1.3%, but the dwelling count kept climbing: 40,771 vacancies nationally, up from 39,229 in June and 37,863 a year ago (when the rate was 1.2%). Rental availability is loosening at the margin — slowly, from historically tight levels, and unevenly.
Last month's report confirmed the easing after the headline rate round-tripped back to its June 2025 level; July's print shows that easing pausing at the national level while continuing city by city. Five capital cities are still below 1% vacancy. SQM and most market analysts treat roughly 3% vacancy as a balanced rental market; no Australian capital is within a percentage point of it.
National Vacancy: Rate Flat, Count Climbing — July 2025 to July 2026
National vacancy rate (line) and total vacant dwellings (bars). The headline rate has plateaued at 1.3%, but the dwelling count has climbed every month since the March low — 40,771 vacancies in July, up from 31,732 in March. Note the horizontal axis is not continuous — August 2025 to February 2026 is omitted.
Source: SQM Research, National Vacancy Rates bulletin, 13 August 2026. March–June 2026 readings from SQM's prior monthly bulletins.
2. The Two-Speed Pattern: Vacancy Now Tracks the Price Cycle
Direct answer
The capitals recording rising vacancy — Sydney, Melbourne, Canberra — are the same capitals recording the deepest price falls. The capitals holding sub-1% vacancy — Adelaide, Perth, Brisbane, Darwin, Hobart — are the markets where prices have fallen least or are still rising. Rental demand and buyer demand are concentrating in the same affordable markets.
| City | Jul 2025 | Jun 2026 | Jul 2026 | Direction (m/m) |
|---|---|---|---|---|
| Sydney | 1.5% | 1.6% | 1.7% | Easing |
| Melbourne | 1.8% | 1.6% | 1.7% | Easing m/m — still below year-ago |
| Brisbane | 0.9% | 0.9% | 0.9% | Flat |
| Perth | 0.7% | 0.6% | 0.6% | Flat (tight) |
| Adelaide | 0.8% | 0.7% | 0.6% | Tightening |
| Canberra | 1.5% | 1.7% | 1.8% | Easing — now loosest capital |
| Darwin | 0.5% | 0.3% | 0.3% | Tightest in the country |
| Hobart | 0.6% | 0.7% | 0.6% | Tightening |
| National | 1.2% | 1.3% | 1.3% | Stable |
Source: SQM Research, National Vacancy Rates bulletin, released 13 August 2026.
Capital City Vacancy Rates — July 2025 vs June 2026 vs July 2026
The split widened in July: Sydney (1.7%), Melbourne (1.7%) and Canberra (1.8%) eased further while Adelaide and Hobart tightened to 0.6% and Perth, Brisbane and Darwin held. Five capitals remain below 1%.
Source: SQM Research, National Vacancy Rates bulletin, 13 August 2026.
This is the detail the flat headline hides. Sydney's vacancy has climbed from 1.5% to 1.7% over the year while its dwelling values fell 4.0% over the quarter on Cotality's index; Canberra is up from 1.5% to 1.8% against a –2.1% quarterly price fall. Those are the two capitals SQM's own commentary singles out for rising vacancies — and both are posting the deeper price declines. Meanwhile Adelaide, the capital with the shallowest downturn in the country, just tightened to 0.6%.
Melbourne is the partial exception, and worth being straight about: its vacancy rose to 1.7% in July, but that is still below the 1.8% of a year ago — the rental market there tightened over the year even as dwelling values fell. The monthly direction has now joined the easing side; the year-long picture hasn't yet. It is the one capital where the vacancy map and the price map disagree, and one reason Melbourne keeps appearing in counter-cyclical screens.
Our reading is that the investor exit is doing the work on both sides. Investor selling adds to buyer-market listings in the expensive capitals, and each investor who sells to an owner-occupier subtracts a rental from supply — but in the tight mid-sized capitals, rental demand is strong enough that the vacancy floor barely moves. The affordable-market thesis we run in the Top 10 Suburbs series shows up in this data as clearly as it does in the price indices.
3. Asking Rents: +7.2% and Accelerating Divergence
Direct answer
National asking rents rose 7.2% over the year to mid-August, with the national combined rent averaging $698.45 per week and the capital-city average at $796.51. Monthly growth slowed to 0.2% — SQM notes this may be the usual winter lull rather than a trend break.
| Market | Combined weekly rent | 30-day change | 12-month change |
|---|---|---|---|
| Sydney | $913.79 | –0.5% | +6.3% |
| Melbourne | $695.20 | +0.2% | +6.0% |
| Brisbane | $756.11 | +1.0% | +8.3% |
| Perth | $803.75 | +0.9% | +6.6% |
| Adelaide | $641.75 | –0.3% | +3.5% |
| Canberra | $705.38 | –1.0% | +5.4% |
| Darwin | $742.54 | +2.0% | +14.1% |
| Hobart | $616.93 | +1.6% | +12.2% |
| Capital city average | $796.51 | +0.2% | +6.5% |
| National | $698.45 | +0.2% | +7.2% |
Source: SQM Research Weekly Rents Index, week ending 12 August 2026, published in the National Vacancy Rates bulletin, 13 August 2026.
The composition matters more than the headline:
- Units are outrunning houses nationally — +7.7% annually versus +6.8%. House asking rents actually fell 0.6% over the month while unit rents rose 1.3%. The affordability rotation we documented in units versus houses is visible in the rental market, not just prices.
- The smallest tight markets are printing the strongest rent growth. Darwin (+14.1%) and Hobart (+12.2%) lead the capitals — both sub-0.7% vacancy — and Brisbane houses are +10.0% annually. The exceptions run the other way, though: Adelaide and Perth are just as tight (0.6%) yet print +3.5% and +6.6%. Tight vacancy sets a floor under rents; it doesn't set the growth rate — tenant incomes do.
- The easing markets are cooling first. Sydney combined rents fell 0.5% over the month (still +6.3% annually); Canberra fell 1.0%. Rent growth is decelerating exactly where vacancy is rising.
Annual Asking-Rent Growth by City — 12 Months to August 2026
Combined (houses and units) asking-rent growth over the 12 months to the week ending 12 August 2026. Darwin and Hobart still lead with double-digit growth; Adelaide is the softest at +3.5% despite 0.6% vacancy — tight vacancy sets a floor under rents, not the growth rate. The national reading is shown in amber.
Source: SQM Research, National Vacancy Rates bulletin, 13 August 2026. SQM Weekly Rents Index, combined houses and units, week ending 12 August 2026.
30-Day Asking-Rent Change by City — to 12 August 2026
Combined asking-rent change over the 30 days to 12 August 2026. Rents fell over the month in Sydney and Canberra — the two capitals with the biggest year-on-year vacancy rises — and kept climbing in the tight small capitals.
Source: SQM Research, National Vacancy Rates bulletin, 13 August 2026. SQM Weekly Rents Index, combined houses and units, 30 days to 12 August 2026.
Important
SQM's rent series measures advertised (asking) rents on new listings — it runs hotter and turns faster than Cotality's hedonic index of the whole rental stock, which printed +5.9% for the year to July. Both are right; they measure different things. Asking rents tell you where the market is pricing a vacant property today; the stock measure tells you what the average sitting tenant's rent did. For underwriting a purchase, the asking-rent series is the relevant one — it is the rent you would actually list at.
4. What It Means for Investors
Investor takeaway
The rental income side of the 2026 investment case remains intact everywhere, and strongest in the affordable capitals. Vacancy at 1.3% national — against the ~3% balanced-market benchmark — means pricing power still sits with landlords in most markets. But the split is a live risk instruction: in Sydney, Melbourne and Canberra, underwrite vacancy assumptions above the current print, because the direction of travel is up. (This note covers the capitals; SQM's regional postcode series is a separate exercise, and our suburb-level reads live in the Top 10 series.)
Three practical readings:
- The tight-vacancy corridors got tighter. Adelaide's move to 0.6% is consistent with the northern-corridor and Salisbury entries in our Top 10 lists (the suburb-level postcode reads sit in that analysis); Perth's 0.6% confirms the metro proxy we use for WA suburbs. The July print strengthens, not weakens, the case for the markets our framework currently selects.
- Rising national vacancies + falling prices = the patient buyer's quarter. More rental stock at the margin lowers the cost of a slow, selective purchase — on our read, the risk of buying poorly then struggling to let is as low as it has been this cycle in the tight capitals. In the easing capitals, do the opposite: budget an extra two to three weeks' letting time in Sydney, Melbourne and Canberra rather than underwriting at the current print.
- The medium-term rent case is still supply-driven. Investor lending fell 3.0% in the March quarter (ABS Lending Indicators) and the SMSF borrowing ban commenced 10 August; every exiting or absent investor is a future rental subtracted. SQM's conclusion is that the market remains undersupplied, and it expects affordability pressures on tenants to remain elevated until available rental stock rises sustainably.
5. What to Watch
Direct answer
The next tests are the 19 August Wage Price Index (whether tenant incomes can keep carrying 7%+ rent growth), the late-August CPI, and SQM's August and September prints — the first mostly- and fully-post-LRBA-ban months.
- 19 Aug — ABS Wage Price Index (June quarter, per the ABS release calendar): rents at +7.2% asking / +5.9% stock versus wages near 3.3% is the tenant-affordability ceiling question.
- ~26 Aug — ABS monthly CPI (July): rents are a heavyweight CPI component; the RBA is watching the same series landlords are.
- ~mid-Sep — SQM August vacancy: the first mostly-post-LRBA-ban month, and the test of whether the winter rent lull was seasonal. The first fully post-ban month is September's data, released around mid-October.
Methodology
How SQM measures vacancy: SQM Research counts online rental listings advertised for three weeks or more against the total number of established rental properties — a threshold that excludes normal tenant-changeover churn. Rentals filled without online advertising sit outside the count, so true availability can be marginally understated in small markets. The asking-rents series is a weekly index of advertised rents, reported here for the week ending 12 August 2026; asking rents on new listings typically lead rents paid across all tenancies by 6–12 months. Vacancy readings are point-in-time monthly figures, not seasonally adjusted. Dwelling-value references are from Cotality's July 2026 Home Value Index and August 2026 Housing Chart Pack; lending references are ABS Lending Indicators (March quarter 2026).
Sources
- SQM Research, National Vacancy Rate Holds at 1.3% (National Vacancy Rates bulletin, July 2026 data), released 13 August 2026 — sqmresearch.com.au
- SQM Research, National Vacancy Rate Rises to 1.3% (June 2026 data), released 14 July 2026 — covered in our June analysis
- Cotality, Monthly Housing Chart Pack, August 2026 edition — covered in our chart pack analysis
- ABS, Lending Indicators, March quarter 2026; Wage Price Index, March quarter 2026
Frequently Asked Questions
SQM Research puts the national residential vacancy rate at 1.3% for July 2026, equal to 40,771 vacant dwellings — unchanged from June's rate but around 1,500 more vacancies. A year ago the rate was 1.2% with 37,863 vacancies.
Darwin (0.3%), then Perth, Adelaide and Hobart (all 0.6%) and Brisbane (0.9%). Canberra is now the loosest capital at 1.8%, followed by Sydney and Melbourne at 1.7%. Five of the eight capitals remain below 1% vacancy.
No. The national rate held at 1.3% — a balanced market is conventionally around 3% — and five capitals are below 1%. Vacancy counts are rising from historic lows, concentrated in Sydney and Canberra. Asking rents are still growing at more than twice the pace of wages.
Different measures. SQM tracks advertised (asking) rents on newly listed vacancies; Cotality's hedonic index tracks estimated rents across the whole rental stock, including sitting tenancies. Asking rents lead the stock measure in both directions. For underwriting a purchase, the asking-rent series is the relevant one — it is the rent you would actually list at.
Not on the income side. Rising vacancy plus decelerating rents while prices fall 1%+ a month means both the income and growth legs are weakening simultaneously. The counter-cyclical case there is a timing argument about prices, not a cash-flow argument. Melbourne is the closest to an exception: its vacancy is still below year-ago levels despite the price falls.
Below about 2% is a landlord's market — tenants compete for stock and rents rise; 2.5–3.5% is roughly balanced. Every capital is currently below 2% and five are below 1%, so the practical screen is relative: prefer sub-1% postcodes, and treat a rising trend (Sydney, Melbourne and Canberra now) as a signal to underwrite conservatively rather than a disqualifier.
The supply side says yes at a slowing pace: SQM expects affordability pressures to remain elevated until available rental stock rises sustainably, and investor lending fell 3.0% in the March quarter before the SMSF borrowing ban commenced in August — both point to constrained future rental supply. The counterweight is tenant incomes: with wages growing around 3.3%, asking rents compounding at 7.2% cannot outrun pay packets indefinitely, and the deceleration is already visible in Sydney and Canberra.
The Bottom Line
July's vacancy data is consistent with the market structure every other August dataset shows. Where prices are falling hardest, vacancy is rising and rent growth is cooling; where entry prices are low and yields work, vacancy is at or near record tightness and asking rents are still climbing — at 8–14% annually in Brisbane, Hobart and Darwin, though Adelaide (+3.5%) shows that tight vacancy alone doesn't set the pace.
The income case for affordable, tight-vacancy markets — the backbone of this site's current positioning — held for another month. The watch item is the post-ban data: August's print (~mid-September) is the first mostly-post-LRBA month, and September's (~mid-October) the first clean one; together they test how much of the recent affordable-market bid was structural.
Disclaimer
This article is general information only and does not constitute financial or tax advice. Consider your circumstances and seek professional advice before acting.
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