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ICYMI, Melbourne just claimed the highest spot in Australia on the annual EIU Global Liveability Index, and we’ve just landed some insights that might further back up the claim (at least for those of us living in rental properties).
While renters across much of Australia are being hit with another wave of sharp price hikes, Melbourne's rental market is proving to be one of the country's rare exceptions. According to Domain's latest June Quarter 2026 Rent Report, rental growth has slowed significantly in Victoria's capital, making Melbourne one of Australia's weakest-performing rental markets this quarter – even as vacancy rates remain stubbornly low. Not great news for landlords looking to cash in, but nice news if you're looking for a new apartment to rent in the city.
The median asking rent for a Melbourne house increased by just $5 over the past three months, reaching a new record of $600 per week. Unit rents, meanwhile, remained unchanged at $600 per week, with annual growth slowing to its weakest pace in four and a half years.
That's a stark contrast to cities like Sydney, where house rents surged by $50 in a single quarter to a record $850 a week – the Harbour City's biggest quarterly jump in four years. Brisbane also continued climbing, with house rents rising to $700 a week, while Darwin has now overtaken Perth as Australia's second most expensive city for renting a house.
So why is Melbourne bucking the trend? According to Domain, affordability appears to be putting a ceiling on further rent increases. While vacancy rates remain exceptionally tight at just 1.2 per cent, landlords are finding it harder to push through the kind of steep increases seen elsewhere.
It's a sign that Australia's rental crisis is becoming increasingly uneven. Sydney, Brisbane, Canberra and Darwin are continuing to record accelerating rental growth, while Melbourne, Perth, Adelaide and Hobart are beginning to show signs that renters have reached their financial limits. That doesn't mean the pressure is off. Melbourne's median house and unit rents are still sitting at record highs, and with housing supply remaining constrained, Domain expects rental conditions to stay challenging through the second half of 2026. Domain's chief residential economist, Dr Nicola Powell, said the national rental market has entered a new phase, with pricing increasingly driven by local conditions and landlord expectations.
While recent policy discussions may have encouraged some landlords to lift asking rents in stronger markets, Powell says Melbourne's slower growth suggests affordability constraints are becoming a bigger influence than ever.
For renters, that's a small silver lining in an otherwise tough market. Prices may not be rising as rapidly as they are elsewhere, but finding an affordable place to live in Melbourne is still far from easy.
You can check out the full report over here.
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