SQM October 2026 Vacancy Rate: 1.5% as Big-City Unit Rents Slip

Published 14 November 2026. Data current to: SQM Research vacancy series for October 2026 and weekly asking rents for the week ending 12 November 2026; Cotality Home Value Index for October (released 2 November); RBA decision of 3 November; ASX market pricing at the 12 November settlement.

Australia's rental vacancy rate rose in October 2026, a month in which it fell in eight of the previous eleven years on SQM Research's series. SQM's national series shows 1.45% vacancy (1.5% at one decimal), up from 1.4% in September, with 44,275 rentals advertised for three weeks or more. That is 22.5% more vacant rentals than a year ago and the highest national reading since December 2024.

Key Takeaways

• Vacancy rose ahead of the season. National vacancy rose 0.07 points in October; from 2015 to 2025 it fell between September and October in eight of eleven years, with a median move of −0.05 points (our arithmetic on SQM's series).
• Melbourne reached 2.0% (2.02% unrounded), above December 2025's seasonal peak (2.00%) and its highest since December 2024, as SQM counted a record 51,264 Melbourne homes for sale.
• Sydney unit rents fell for a second month, to $743.95 a week, cutting annual growth to 2.0% from 3.5% (SQM Research).
• Perth and Adelaide rents firmed 1.1%; Brisbane's were flat while its vacancies jumped 12.8% in the month (SQM Research).
• At 4.85%, interest dominates a geared buyer's cash flow. On our illustrative Sydney unit, a 3% rent cut costs about $1,016 a year against $1,720 for one more rate rise.

At a Glance: SQM Vacancy and Rents, October 2026

Source: SQM Research, vacancy rate series, October 2026, and weekly asking rents, week ending 12 November 2026 (rolling-month and 12-month changes as published); RBA, 3 November 2026; ASX RBA Rate Tracker, settlement of 12 November 2026. Percentage-point changes are our arithmetic on SQM's one-decimal rates unless an unrounded figure is shown.

What Changed in the October 2026 Vacancy Rate

Source: SQM Research, vacancy rate series, October 2026, with September 2026 and October 2025 from the same series. One-decimal rates are SQM's ratios rounded; percentage-point changes are our arithmetic on those rates. Darwin's and Hobart's stocks are very small and their monthly moves are volatile.

On SQM's series, the cycle low was 1.0% in March 2026 with 31,732 vacancies. April's rise to 1.2% was the turning point, the rate held near 1.3% through winter, and September's 1.4% was the first step up since June. Since March the market has added about 12,500 vacant rentals; the full series is on the vacancy rate tracker.

Melbourne's unrounded 2.02% is just above the 2.00% of its December 2025 seasonal peak and the highest since December 2024's 2.22% (our arithmetic on SQM's series). Brisbane's vacancies are now 7.2% above a year ago, after running below year-ago levels in September. Canberra was flat in both rate and count, holding 36% more vacancies than a year ago.

Is October's Rise Seasonal?

Source: SQM Research, national vacancy rate series (unrounded rates from SQM's published vacancy counts and rental stock). Changes are computed on unrounded rates, so they may differ from the rounded columns by 0.01 (2025 rose 0.004 points). Medians and the December illustration are our arithmetic; the 2015–2025 October-to-December step ranged from +0.02 points (2021) to +0.50 points (2016).

The three cities that drove October broke the same pattern on SQM's series:

Source: SQM Research vacancy series (unrounded rates from vacancy counts and rental stock); medians of the eleven September-to-October changes, 2015–2025, are our arithmetic.

Our interpretation. A rise before the summer turnover suggests more than seasonal turnover is adding rental stock, and the data offers two candidates without separating them. One is weaker rental demand. Cotality's Tim Lawless said on 2 November that “Renters are likely to be approaching a ceiling on their capacity to pay more” and that “A slower rate of net overseas migration is another factor that has probably helped to take some heat out of rental demand.” The other is spill-over from the sales market. SQM counted 301,201 homes for sale in October, 19.3% more than a year ago, with homes listed for one to six months up 41.1%, and owners who cannot sell sometimes lease instead. Neither dataset shows how many listings crossed over, so we hold it as a scenario; completions of new rental dwellings would also add stock, and this data does not separate them. SQM's Louis Christopher said of Melbourne and Canberra's record sales stock (3 November): “It is stock accumulating because it is not selling, which points to soft buyer demand in those markets.” Those two cities also have the highest rental vacancy.

Asking Rents in October: The Annual Rate Drops to 6.4%

Source: SQM Research, weekly asking rents, week ending 12 November 2026 (rolling-month and 12-month changes as published by SQM). Asking rents on new listings, not rents paid by sitting tenants.

Why the annual rate fell 1.2 points in a month. Over the same four weeks of 2025, SQM's national combined series rose about 1.6% (from $655.17 to $665.55 a week); this year it rose 0.5% (from $704.76 to $708.31). When a strong month leaves the twelve-month window and a weaker one replaces it, the annual rate drops by roughly the difference (our arithmetic on SQM's weekly series). If the monthly series stays near flat, the annual rate keeps falling as the strong late-2025 months roll out.

The national unit figure (+1.6%) and SQM's capital-city average for units (−0.3%) moved in opposite directions, so the national rise came from outside the capitals or from composition. The capital-city figures are the better guide to the city story.

How other rent measures compare

Source: SQM Research (week ending 12 November 2026); Cotality Home Value Index, October 2026 (released 2 November) and Cotality Monthly Housing Chart Pack, November 2026 (annual change); ABS Consumer Price Index, September 2026 (released 28 October 2026).

The RBA's November Statement on Monetary Policy noted that “vacancy rates have increased modestly and growth in advertised rents has slowed.” The CPI measure lags as 2025 leases reset; our September CPI analysis covers why.

The City Split: Sydney, Melbourne and Canberra vs Brisbane, Perth and Adelaide

Sydney and Melbourne: units soften again

Sydney's vacancy count reached 13,872, 45% more than a year ago and the largest annual rise of any capital (SQM Research). House asking rents rose 1.6% to $1,175.11 a week while unit rents fell 0.7% to $743.95, after a 1.0% fall the month before, leaving annual unit growth at 2.0% against 5.1% for houses. Cotality's index points the same way: Sydney unit rents up 3.0% over the year to October, houses 4.6%. Last month we said a Sydney unit rebound of 1% or more in October would make September look like a blip, and unit rents fell instead.

Melbourne's combined asking rent fell 1.0% to $685.54, with units down 1.6% in the month and 3.6% over the quarter (SQM Research). In September SQM saw “no sign yet of a spring lift” there, and October has not produced one. Its 2.0% is back inside the 1.8% to 2.3% range SQM recorded for the city each October from 2015 to 2019. With a record 51,264 homes for sale (SQM), rising rental stock and the highest state unemployment rate (Victoria 5.1% in September, ABS), Melbourne shows the clearest signs of weak demand among the capitals on these indicators. Our four-signals framework for Melbourne tracks it from the buyer's side.

Canberra held at 1.9%, and its combined asking rent is up just 1.6% over the year, the slowest of any capital (SQM Research); with September's headline CPI at 4.3% (ABS), its asking rents are falling in real terms.

Brisbane, Perth and Adelaide: tight, with Brisbane turning

Perth and Adelaide fit SQM's description of tight markets: vacancy at 0.6%, fewer vacant rentals than a year ago (Adelaide −20.9%, Perth −4.8%), and rents that rose in October. Brisbane's vacancies rose 12.8% in a month to 3,635 while its rents were flat for a second month (−0.1%). SQM wrote in September that Brisbane “retains the capacity for further rent rises into summer”; one month in, that has not shown, and SQM's sales stock for Brisbane is 44.2% above a year ago.

Darwin and Hobart: small markets, big swings

Darwin's 199 vacant rentals and Hobart's 114 are small enough that a few dozen listings move the rate, so their monthly readings are volatile (SQM Research). Darwin rose to 0.8% and its combined asking rent is up 11.8% on the year, the fastest of any capital, though unit rents fell 3.2% in the month. Hobart eased to 0.4%, the tightest capital, with house rents down 1.6% in the month and unit rents up 4.0%. Read both on the twelve-month figures rather than one month's move.

Source: SQM Research, October 2026 (vacancies) and week ending 12 November 2026 (rents); Cotality Home Value Index, October 2026 (index results as at 31 October, released 2 November 2026; falls measured from each city's record high, so Melbourne's is from March 2022 rather than the start of the current downturn) and Cotality Monthly Housing Chart Pack, November 2026 (annual rent change). Our pairing of the datasets; neither provider publishes this comparison, and it is descriptive rather than a modelled relationship.

Our interpretation. Brisbane, Perth and Adelaide all fell in Cotality's October index while their vacancy on SQM's series stayed at 1.0% or below, and Adelaide's vacant stock is 20.9% lower than a year ago. Tight rental markets haven't stopped prices falling; borrowing capacity at higher rates, buyer sentiment, affordability and the tax changes Cotality cites can move prices whatever rents are doing. The table describes the two markets side by side and doesn't show cause and effect. For investors, rent in Perth and Adelaide is still on firm footing as values fall, and Brisbane's October vacancy jump is the reading to watch.

Was SQM's December Path Right? The October Scorecard

Source: SQM Research releases of 15 September and 13 October 2026; SQM vacancy series, October 2026; SQM weekly asking rents, week ending 12 November 2026. “Our reading” is our assessment.

Our scenarios, updated. Last month's three October tests split: national vacancy cleared 1.4% (now 1.5%) but Sydney missed 1.9%, Perth firmed but Brisbane did not, and Sydney unit rents fell rather than rebounding.

Our scenario framing on SQM's published expectations. The scenarios are qualitative and not modelled.

Brisbane is the open question in the base case. If its rents stay flat while vacancy keeps rising, the split becomes Perth and Adelaide on one side and the rest on the other.

What a 4.85% Cash Rate Means for Rental Cash Flow

The RBA raised the cash rate to 4.85% on 3 November by a 6–3 vote, and the big four banks passed it on from 13 November. We use the same modelled rates as our RBA 4.85% analysis: about 6.90% for a new investor variable loan and about 7.10% for an existing interest-only investor loan. They are illustrative assumptions built on RBA averages, not market offers: RBA Table F6 put new investor variable loans (all repayment types) at 6.41% in August and existing investor interest-only loans at 6.57%, and adding the September and November rises gives 6.91% and 7.07%, rounded to match that analysis. New interest-only loans averaged 6.51%, so a new interest-only borrower would sit nearer 7.0%. Actual rates vary by lender, LVR and product.

Worked example: a Sydney unit bought now

Illustrative example with hypothetical property, loan and costs. Rent is SQM's Sydney all-unit asking rent; the price is close to Cotality's Sydney unit median ($857,872, October 2026).

Source: our illustrative calculations. Rent: SQM Research, week ending 12 November 2026. Price reference: Cotality Home Value Index, October 2026. Costs are assumptions, not market data; strata, rates and insurance vary widely by building and council. Recurring costs only: land tax is excluded (it depends on the owner's total land holdings and state, and can be nil for a single unit or material for a larger portfolio), as are one-off costs such as special strata levies.

The gross yield on that rent is 4.50%, in line with the 4.5% Cotality reports for Sydney units, while an 80% interest-only loan at 6.90% needs about 5.5% (0.8 × 6.90%) just to cover interest. Rent would have to reach about $913 a week to cover the interest and about $1,261, 69% above today's asking rent, for a zero pre-tax cash flow. Tim Lawless made the same point on 2 November: “Although yields have risen to their highest level in more than eleven years, they are still nowhere near the levels needed to deliver a neutral or positive cash flow.”

Which lever matters most

Source: our illustrative calculations on the worked example above. Rent changes are net of the 7% management fee and the smaller letting fee. “All three together” is recalculated jointly, so it is about $42 less than the sum of the rows: the two extra vacant weeks are lost at the lower rent. Pre-tax; excludes depreciation, land tax and capital growth.

For the new buyer, one 25-basis-point move outweighs either rental shock on its own, and the five rises of 2026 have already added $8,600 a year to this loan's interest compared with January's rate (5.65% to 6.90%), more than eight times the cost of the 3% rent cut. For an owner with a smaller loan the ranking flips. A 3% rent cut plus two empty weeks ($2,400) costs more than twice a further rate rise ($1,075), so the rental market becomes the main cash-flow risk.

On a Perth house, where rents are still rising, the rate still dominates. A $980,000 house (near Cotality's Perth house median) with a $784,000 interest-only loan at 6.90%, let at SQM's $895 asking rent with one vacant week, 7% management, a one-week letting fee, council and water rates of $3,200, insurance of $1,900, maintenance of $2,500, no strata and no land tax, runs at about −$20,141 a year before tax. A 4% rent rise would improve that by about $1,662, less than the $1,960 a further 25-basis-point rise would cost.

What to Watch

• ABS Labour Force, 19 November. Unemployment was 4.7% in September and 5.1% in Victoria; the RBA forecasts 4.7% for the December quarter, rising to 5.1% by December 2028. A further rise in Victoria would add a demand-side reason to Melbourne's vacancy.
• SQM weekly rents, 20 November. The first read on whether Sydney and Melbourne unit rents are still falling.
• Cotality Home Value Index, 1 December. Whether Brisbane's rising vacancy starts to show in Cotality's rent index for the city.
• RBA, 8 December. Priced at 97% for no change (ASX, 12 November). A rise to 5.10% would cost the new buyer in the example another $1,720 a year.
• SQM November vacancy, mid-December. National vacancy has risen a median 0.10 point from October to November (2015–2025, our arithmetic; rises in 9 of 11 years, from −0.05 to +0.24), which would take October's 1.45% to about 1.55% and a 1.6% print. A reading above about 1.56% unrounded would put this year ahead of the usual seasonal step; at one decimal, only 1.7% or more would show that clearly, and 1.6% would be on it. Sydney at 1.9% would meet SQM's December marker, and a Brisbane rent rise of 1% or more would put it back with the tight group.

Methodology and Limitations

SQM's series runs from 2005 and is subject to minor revision, including recent weeks of the rent series. Darwin (199 vacancies) and Hobart (114) have very small stocks, and the scenarios are qualitative framings of SQM's published expectations.

The Bottom Line

SQM Research's series shows national vacancy at 1.5% in October 2026, with 44,275 vacant rentals, 22.5% more than a year ago. Melbourne reached 2.0%, Sydney's vacant stock is 45% above last October and Brisbane moved back to 1.0%, in a month when national vacancy fell in eight of the previous eleven years.

For investors, the rental case now depends on city and dwelling type. Perth and Adelaide rents firmed, Brisbane's stalled as vacancy jumped, and Sydney and Melbourne unit rents fell for a second month. At a 4.85% cash rate a geared buyer's cash flow is mostly interest, and softer rents add to a shortfall the rate rises have already widened.

What to monitor: whether Sydney and Melbourne unit rents keep falling through the December leasing peak, whether Brisbane's rents follow its vacancy, and whether SQM's November figure runs ahead of the usual seasonal step (above about 1.56% unrounded, or 1.7% at one decimal). The 8 December RBA decision, priced at 97% for no change (ASX, 12 November settlement), is the next test for the interest side.