What happened
Cotality reported Australian annual rental growth rose to 6.4% in the year to August 2026. Meanwhile, ABS mortgage data showed new investor home loans fell 10% in the second quarter, led by a 13% drop in established property lending following federal budget tax changes, while new construction lending rose 6%.
Why it matters here
Low capital city vacancy rates under 2% ensure rental growth will remain elevated between 5.5% and 6.5% over the next year. Reduced private investment in existing housing limits rental supply, maintaining pressure on tenant affordability across major capital markets like Sydney, Melbourne, and Brisbane.
What to watch
Keep track of quarterly ABS housing finance figures and capital city vacancy rate updates over the next six months to evaluate investor allocation shifts.
Source
savills.com.au