SQM National Vacancy June 2026: 1.3% — The Easing Is Confirmed, But Only in Half the Country

Australia's headline rental vacancy rate has completed a round trip. SQM Research's June 2026 vacancy report, released 14 July 2026, puts the national residential vacancy rate at 1.3%, up from 1.2% in May, with total vacancies rising to 39,229 dwellings from 37,844. Twelve months ago, in June 2025, the same series read 1.3% and 39,027 dwellings. After a year in which vacancy plunged to 1.0% in March and then reversed, headline vacancy is back at its year-ago level — though, as the city detail below shows, the market underneath looks very different from June 2025.

That round trip goes a long way to settling the question we posed in our April analysis, which asked whether the first vacancy rise in 12 months was a turning point or noise. Three consecutive prints later — 1.2% in April, 1.2% held in May, 1.3% in June — the data suggests the tightening cycle that defined 2025 has paused, and quite possibly ended. What has replaced it is not a loosening cycle, though. It is a split market, and the split is now the story.

Four capitals are easing: Sydney, Melbourne, Canberra and Hobart all recorded higher vacancy in June. Four are not: Perth tightened to 0.6%, Darwin held at an extraordinary 0.3%, and Brisbane and Adelaide sat unchanged at 0.9% and 0.7%. Asking rents told the same two-speed story, falling over the month in the easing cities while Brisbane, Adelaide, Canberra and Darwin rents kept climbing.

This piece reads the 14 July bulletin three ways — month-on-month, year-on-year, and against the long-run baseline — then walks the city-by-city split, reconciles the rental data against the price downturn showing up in the June Cotality Home Value Index, and sets out what the numbers mean for investors positioning around the 1 July 2027 negative gearing changes.

1. The Headline Numbers, Read Three Ways

Source: SQM Research, National Vacancy Rates bulletins, March–June 2026 data.

1.1 Month-on-month: the third rise in four prints

The national rate moved from 1.2% to 1.3% between May and June, adding 1,385 vacant dwellings. On its own that is a modest move. In sequence, it is decisive: March 1.0%, April 1.2%, May 1.2%, June 1.3%. The trend since autumn has run one way, and the June print is the first time the easing has pushed the headline rate back to its year-ago level rather than merely slowing the tightening.

Almost all of the June rise came from one city. Sydney added 1,137 vacant dwellings month-on-month, accounting for 82% of the national increase. Melbourne (+194), Canberra (+93) and Hobart (+24) contributed the rest, while Brisbane, Perth, Adelaide and Darwin all recorded fewer vacant dwellings in June than in May. Strip Sydney out of the national number and the “easing” largely disappears.

1.2 Year-on-year: the round trip

June 2025: 39,027 vacancies, 1.3%. June 2026: 39,229 vacancies, 1.3%. A difference of 202 dwellings nationally, or half of one per cent of the vacant stock. On the headline series, the rental market spent a year tightening and then gave it all back within a quarter.

The city-level detail is where the year told different stories:

• Melbourne has 774 fewer vacant dwellings than a year ago, with its rate down from 1.8% to 1.6%. It entered the year as the loosest capital and no longer is.
• Perth (–210 dwellings, 0.8% to 0.6%), Adelaide (–172, 0.8% to 0.7%) and Darwin (–51, 0.5% to 0.3%) all tightened over the year, against the national grain.
• Sydney (+475 dwellings, 1.6% flat) and Canberra (+143, 1.5% to 1.7%) supplied the offsetting looseness.

1.3 The long-run baseline: still a landlord's market everywhere

The pre-2020 range commonly regarded by market analysts as a balanced rental market is 2.5–3.5% vacancy, and SQM's own long-run chart in the bulletin is consistent with it, showing the national series holding that band from 2010 until the 2021 collapse. At 1.3%, June 2026 sits at roughly half the lower bound. Every capital city remains below 2%, a point the bulletin makes explicitly, and five of the eight are below 1%.

SQM managing director Louis Christopher's framing in the release keeps the easing in proportion:

"While the national vacancy rate has edged up to 1.3%, Australia's rental market remains exceptionally tight by historical standards. Most capital cities continue to record vacancy rates below one per cent or only marginally above, highlighting that rental supply remains insufficient to meet demand."

1.4 Reading the three views together

• The easing trend is well established, and Sydney is driving it. Three rises in four months is a trend, not noise — though a July reversal would force a rethink.
• The national average is increasingly misleading. A 1.3% headline built from a 1.6% Sydney and a 0.3% Darwin describes neither market.
• Our assessment: the eastern seaboard's biggest two rental markets appear to have found their affordability ceiling, while the resource-state capitals still have functionally zero rental slack.

2. City-by-City Vacancy Breakdown

2.1 The full June 2026 vacancy table

Source: SQM Research, National Vacancy Rates bulletin, released 14 July 2026.

One note on coverage: the eight capitals account for 27,317 of the 39,229 national vacancies, which leaves roughly 11,900 vacant dwellings in regional Australia. The bulletin doesn't publish a combined regional vacancy rate, but the arithmetic implies regional markets remain at least as tight as the tight-side capitals — consistent with the supply picture in our regional investment guide. Regional investors should read the tight-city analysis below as the closer analogue.

2.2 The easing side of the ledger

Sydney — 1.5% to 1.6% (+1,137 dwellings, 11,957 total)

Sydney's rise did the heavy lifting in the national number, and the bulletin describes the market plainly: continuing to ease modestly, but still considerably tighter than historical averages. The affordability arithmetic explains most of it. Sydney house asking rents average $1,149.81 per week on SQM's rent index, and combined rents eased 0.4% over the month even with annual growth still running at 7.6%. Tenant demand at these price points is doing what it always eventually does: consolidating into share-houses, trading down to units, and relocating along the transport spines. Our analysis: this is demand fatigue, not oversupply. Sydney added roughly 475 vacant dwellings over a full year; a genuine supply wave would show up far faster than that.

Canberra — 1.6% to 1.7% (+93 dwellings)

Canberra is now the loosest capital in the country and the only one whose vacancy rate has risen consistently across the past year (1.5% → 1.7%). The bulletin notes a gradual easing in rental availability. Combined rents still rose 0.7% over the month, though, so looseness remains relative.

Hobart — 0.6% to 0.7% (+24 dwellings)

A small move from a tiny base, and Hobart rents are still up 12.1% year-on-year, the second-strongest annual growth of the capitals. The easing here is marginal availability, not price relief.

Melbourne — flat at 1.6% (+194 dwellings)

Melbourne belongs on this side of the ledger by level rather than by direction. It held at 1.6%, but the year-on-year picture (1.8% down to 1.6%, 774 fewer vacancies) means Melbourne actually tightened over the year even as its dwelling values fell. The bulletin calls its conditions relatively balanced compared with other capitals. In our assessment, that combination — falling prices, tightening rentals — is the most interesting single-city setup in the release, and we return to it in Section 4.

2.3 The tight side of the ledger

Perth — 0.7% to 0.6% (–18 dwellings, 1,247 total)

Perth was the only capital to tighten in June, and it did so while Perth asking rents fell 1.6% over the month, the sharpest monthly rent decline of any capital. Vacancy tightening while rents ease is unusual; our reading is that Perth rents overshot through 2024–25 (annual growth still shows +5.0% even after the pullback) and are now normalising against a market that remains, in the bulletin's words, one of Australia's most constrained.

Darwin — flat at 0.3% (64 vacant dwellings)

Sixty-four vacant dwellings in an entire capital city. Darwin has been below 0.5% for over a year, and its combined asking rents are up 13.8% year-on-year, the strongest in the nation, with unit rents up an extraordinary 19.1%. Christopher singles it out alongside Perth:

"Perth and Darwin remain particularly constrained, with vacancy rates of just 0.6% and 0.3% respectively. Without a substantial increase in the supply of rental housing, affordability pressures are likely to remain a challenge for tenants for some time yet."

Brisbane — flat at 0.9% (–59 dwellings)

Brisbane recorded fewer vacancies in June than May and sits exactly where it was a year ago at 0.9%. Meanwhile its combined rents rose 1.0% over the month and 9.1% over the year, the strongest annual growth of the eastern capitals. The bulletin attributes the tightness to continued population-growth-driven demand. On these numbers, Brisbane is the clearest case in the country of a market where rental income momentum has not slowed at all.

Adelaide — flat at 0.7% (+15 dwellings)

Limited stock continues to underpin tight conditions, per the bulletin. Adelaide's annual rent growth of 3.4% is the lowest of the capitals, an odd pairing with its 0.7% vacancy that suggests Adelaide's affordability ceiling sits lower than the eastern capitals'.

3. Asking Rents: Moderating at the National Level, Still Climbing in the Tight Cities

3.1 The full rent table

Source: SQM Research Weekly Rents Index, week ending 12 July 2026, published in the National Vacancy Rates bulletin, 14 July 2026.

3.2 What the rent data adds to the vacancy picture

Three observations stand out from the rents table.

First, the monthly direction now matches the vacancy split almost perfectly. The four markets where rents fell over the month (Sydney, Melbourne, Perth, Hobart) include the three largest easing markets. The four where rents rose (Brisbane, Adelaide, Canberra, Darwin) include the three tightest. Perth is the exception in both directions — vacancy tightening, rents falling — which we read as post-boom rent normalisation rather than demand weakness.

Second, houses are moderating faster than units at the national level. National house rents eased 0.5% over the month (annual +8.7%) against a 0.2% monthly decline for units (annual +7.1%). The bulletin reads this as rental growth beginning to moderate after a sustained period of strong increases. At the price extremes the unit story diverges sharply: Darwin unit rents are up 19.1% year-on-year and Hobart units 16.0%, while Perth units have slowed to +2.4%.

Third, the annual numbers remain large everywhere. Even the softest annual print (Adelaide, +3.4%) is running ahead of headline wages growth in most quarters, and the national +8.1% is roughly double the most recent headline CPI reading (4.0% for May 2026) — with the caveat that this compares advertised asking rents on new listings against the broader CPI basket, not like with like. Christopher's middle paragraph in the release captures the balance: “The encouraging sign is that rental growth appears to be moderating in some markets, with national asking rents easing slightly over the past month. However, annual rental growth remains strong at 8.1%, and cities such as Darwin, Hobart and Brisbane continue to experience significant rental inflation.”

4. Reconciling the Rental Data With the Price Downturn

The June SQM print landed two weeks after the Cotality June Home Value Index showed the price downturn deepening in Sydney and Melbourne, and alongside a NAB Housing Monitor that recorded investor sentiment at multi-year lows following the Budget's negative gearing and CGT reforms.

Put the three releases together and the investor-relevant picture for the two biggest cities looks like this:

• Prices: falling (Sydney –1.2% in June per Cotality; Melbourne –1.0%).
• Rents: still rising year-on-year (+7.6% and +5.9% respectively) but flat-to-easing month-on-month.
• Vacancy: easing but still under 2% (1.6% in both).

Our analysis: falling purchase prices against rents that are 6–8% higher than a year ago means gross yields on new acquisitions in Sydney and Melbourne are improving each month this configuration persists. The vacancy easing matters for income risk — longer leasing times, less pricing power at renewal — but at 1.6% both cities remain well inside the range where quality stock leases within weeks, not months. The real income-risk markets in this print are none of the capitals; every one of them is below the balanced-market floor.

4.1 The yield arithmetic

The mechanics are worth making explicit, because they run counter to sentiment. Gross yield is annual rent divided by price, so when the numerator rises while the denominator falls, the yield improves at both ends. Take a Sydney property that yielded 3.2% gross a year ago. Per Cotality, Sydney dwelling values are now 3.7% below their January 2026 peak; per SQM, Sydney combined asking rents are 7.6% higher than a year ago. A property tracking both averages now yields roughly 3.2% × 1.076 ÷ 0.963 ≈ 3.6% gross on today's price. That is a 35-to-40-basis-point improvement in twelve months, achieved entirely by market drift.

Melbourne's version of the same arithmetic is stronger again: values down 4.0% from their 2022 high and drifting lower through 2026, rents up 5.9% year-on-year, and vacancy tighter than a year ago. Melbourne is the only easing-price capital whose rental market firmed over the year, which is why it keeps appearing at the top of counter-cyclical screens, including our recent top-10 suburb lists.

Two caveats belong to this arithmetic. First, it works with asking rents; portfolio rents reset only at renewal or re-letting, so realised yields lag. Second, the monthly rent direction in both cities has turned slightly negative, so the numerator's contribution is plateauing. The yield improvement from here likely comes mostly from the price side, which is a less comfortable way to earn it.

4.2 The supply backdrop

The vacancy series also needs to be read against what is happening to rental supply at the source. Cotality's July Housing Chart Pack, released the same week as the SQM bulletin, counted 33,935 new listings nationally over the four weeks to 5 July, 6.2% below the five-year average, with total listings at 131,407, still 3.5% below the five-year average despite sitting 7.7% higher than a year ago. Sales listings are not rental listings, but the two markets share a pipeline: every investor sale to an owner-occupier removes a rental from the stock, and ABS building approvals data through May 2026 continues to show completions running well short of underlying household formation.

Our analysis: this is why the June easing should not be extrapolated in a straight line. The vacancy improvement of 2026 has come almost entirely from the demand side — affordability ceilings, overseas migration normalising from its 2023–24 peaks, and slower interstate-migration-driven household growth in the biggest two cities — rather than from new rental supply arriving. Demand-side easing is reversible; supply-side easing is durable. Until completions lift materially, the structural floor under rents remains.

The forward-looking question is what happens to rental supply as the 1 July 2027 negative gearing changes approach. Established dwellings purchased after 7:30pm AEST on 12 May 2026 lose access to negative gearing against salary income from 1 July 2027, while new builds retain it. In the April bulletin, Christopher noted SQM had modelled a negative-gearing pullback scenario and expected additional pressure on the rental market as investor participation in established stock thins. If investor behaviour follows the direction of SQM's modelling, the effect would be fewer investor-held established rentals with more investor demand channelled to new supply; Treasury's own Budget factsheet anticipates the same direction at a much smaller magnitude (under $2 a week on the median rent). June's investor lending data will take months to flow through to rental listings, so this remains a scenario to monitor rather than an established outcome. We set out the full policy mechanics in our reform guide and post-Budget strategy piece.

5. What This Means by Investor Cohort

Source: vacancy and rent data from SQM Research (June 2026 bulletin); “our read” column is our editorial assessment.

Buyers targeting yield. Brisbane's combination — 0.9% vacancy, +9.1% annual rent growth, +1.0% over the month — is the strongest income profile of any capital in this release. Adelaide and Perth offer tighter vacancy but visibly slowing rent growth (+3.4% and +5.0% annually). Darwin's 13.8% rent growth on 0.3% vacancy is the outlier, with the usual caveats about market depth and resource-cycle concentration that we covered in the May top-10 suburbs report.

Buyers targeting the downturn capitals. For counter-cyclical buyers working Sydney and Melbourne, the June print is mildly supportive: rents are holding up far better than prices, and Melbourne in particular is tighter than it was a year ago. The discipline required is on rent assumptions at underwriting — use current asking rents, not asking rents plus trend growth, because the monthly direction in both cities has turned flat-to-negative.

Existing holders in easing markets. With Sydney vacancy at 1.6% and rising, the renewal-negotiation balance is shifting. A tenant facing a large increase now has alternatives they did not have in 2025. Our analysis: in the easing capitals, a renewal priced 2–3% below peak asking beats a vacancy period at these rent levels; four weeks vacant on a $917-per-week Sydney property costs more than a full year of that discount.

Existing holders in tight markets. Perth, Adelaide, Brisbane and Darwin holders retain full pricing power at renewal. The rent table suggests the ceiling is approaching in Perth (asking rents –1.6% over the month), so marking to current asking rather than to last year's growth rate is the prudent path there too.

SMSF trustees. Residential property inside super is unaffected by the negative gearing changes (superannuation funds, including SMSFs, are excluded from the loss-quarantining rules), but the LRBA ban legislated to commence around 10 August 2026 closes the leveraged acquisition window. For unleveraged SMSF purchases, the vacancy data reads the same as for any cash buyer: the income side of the equation remains historically strong in every capital.

6. What to Watch Next

Four upcoming data points will confirm or complicate the June story:

1. SQM July vacancy bulletin (~mid-August). The single most important follow-up. A fourth rise in five prints, or a Sydney rate at 1.7%+, would confirm the easing is compounding. A flat or lower print would suggest June's Sydney jump borrowed from seasonal winter listing patterns.
2. RBA August decision. The cash rate sits at 4.35% following the May increase, and the May CPI print at 4.0% left the August meeting live. Rate relief would support tenant-to-buyer conversion at the margin, which historically loosens rental demand in the most expensive cities first.
3. NAB Residential Property Survey Q2 (early August). The June NAB Housing Monitor recorded investor sentiment at post-reform lows; the quarterly survey will show whether that sentiment is translating into actual divestment intentions, which would flow to rental stock either way — sales to owner-occupiers shrink it, sales to other investors preserve it.
4. Spring listing season (September–November). Cotality's auction-share data already shows vendors shifting to private treaty as clearance conditions soften. If spring brings the usual seasonal listing wave into a falling-price market, some would-be vendors will rent properties out instead, a channel that added meaningful rental supply in the 2018–19 downturn.

The easing is also not guaranteed to continue. Three scenarios could re-tighten the market from here: an RBA pivot to cuts restoring borrowing capacity and household formation faster than supply responds; the construction pipeline undershooting even current expectations as approvals stay weak; and post-reform investor selling transferring rental stock to owner-occupiers faster than new builds replace it. We treat these as risks to monitor, not forecasts.

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