There’s a glimmer of good news for house renters this week, but apartment tenants – who make up more than half the high-rise population – may only see worrying trends.

New Domain figures, reported in ABC News, show the house rental market has finally run out of puff. Across the capitals, the median house rent sat unchanged at $700 a week through the September quarter. In Sydney and Canberra, house rents went backwards, by $5 and $10 a week respectively, wiping out the rises recorded in June.

Units are another story. Over the same three months, capital city unit rents rose 1.5 per cent. That’s hardly a surge, but it means that while tenants in houses are getting a breather, and in two cities a small cut, people renting apartments are still paying more than they were in winter.

Why the gap? The ABC report offers a clue. Independent property economist Cameron Kusher, of Kusher Consulting, told the broadcaster that after years of steep increases, tenants are coping by compromising: taking cheaper places in suburbs they wouldn’t have chosen, moving into share houses, or staying on in the family home as adults.

It’s not a great leap to add “swapping a house for a flat” to that list, and Domain itself saw it coming. Its Forecast Report for 2026 tipped unit rents to outpace house rents in most capital cities, as affordability pressures pushed more tenants toward apartments.

That looks to be what’s happening. Many people priced out of a house become more applicants in the queue for a unit, and that demand keeps apartment rents climbing even as house rents stall.

Domain’s chief residential economist, Dr Nicola Powell, told the ABC’s The Business that the usual link between scarce supply and rising rents is breaking down because tenants can’t absorb any more. It is still, she said, “a landlords’ market” in every capital and in the regions, but a shortage of properties no longer translates automatically into higher rents.

And the shortage is real. The national vacancy rate edged up 0.1 of a percentage point to just 1 per cent, leaving the market tighter than it was a year ago. House rents remain at or near record levels, with Sydney, Darwin and Perth the dearest. Rents flatlined in Melbourne, Brisbane, Perth and Adelaide, and only Darwin (up 5.3 per cent) and Hobart (up 1 per cent) recorded house rent rises.

For apartment investors, Mr Kusher had one more observation: this year’s budget changes that made property investment less attractive are still working through the system, but so far they haven’t produced the big jump in rents many feared. So far…

So renters may well have hit their limit, as the ABC’s headline has it. The figures suggest the people renting houses got to their limit first but units won’t be far behind. And if you’re thinking of switching to an apartment, you have a tricky choice – hope house rents will continue falling or switch to an apartment and lock in your rent before it goes up even higher.

Sources:

• Renters have reached their absolute affordability limit, Domain data finds (ABC News)
• Rents forecast to hit record highs in every capital city in 2026 (Domain)