Why the cost of renting a city apartment is now on par with houses

The median asking rent for an apartment in Australia’s capital cities is now on par with houses at $600 per week. This follows an extraordinary almost 25 percent surge in city apartment rents over the past year alone, compared with a 13.2 percent lift in house rents, according to Domain’s September quarter rent report.

The report’s findings are remarkable given units have reliably offered cheaper accommodation than houses historically. The $600 per week median was recorded across the combined capital cities, whereas in regional areas, median unit rents are still well below houses at $450 per week compared to $520 per week. The report reveals the Australian market has gone through the longest period of continuous rental price growth on record. The September quarter marked the 10th consecutive quarter of house rental growth (up 3.4 percent)and the 9th consecutive quarter of unit rental growth (also up 3.4 percent).

Apartment rents have surged the most over the past year in Sydney, Melbourne, and Brisbane, where weekly rents have risen by about 20 percent to record highs of $680, $520 and $550, respectively. Unit rents are also at a record high in Adelaide at $450 and Perth at $500. Across the other capitals, median unit rents are $450 in Hobart, $520 in Darwin and $550 in Canberra.

The key traditional drivers in Australia’s long-term shift to apartment living have been greater supply of apartments than houses, especially in popular urban suburbs with major infrastructure, and comparative affordability. Another factor is the increasing number of Australians living alone. Some are younger people who are increasingly delaying marriage until later in life. Australia also has an ageing population, so there is a rising number of older people living alone following the death of a spouse or the end of a marriage.

Exacerbating current demand for apartments is an undersupply. New apartment approvals have fallen to their lowest levels in a decade, according to the Australian Bureau of Statistics. Approvals have dropped by 15.8 percent over the past year amid the construction industry grappling with a shortage of materials and labour.

Domain’s rent report also showed that record weekly house rents were reached or sustained in Sydney at a median of $720, Melbourne at $550, Brisbane at $590, Adelaide at $550, Perth at $600, and Darwin at $650 during the September quarter. In the other capitals, median house rents are $530 in Hobart and $655 in Canberra.

Canberra was the only city not recording a record unit or house rental value over the quarter. Interestingly, the ACT is the only state or territory with a rental cap in place. The cap limits landlords to annual rental increases at the territory’s CPI rate for rents plus 10%. The Federal Greens recently lobbied for a temporary cap across Australia to help tenants cope with a runaway market, but Prime Minister Anthony Albanese said such propositions were a matter for each state and territory to consider separately.

Domain chief of research and economics, Dr Nicola Powell said the previous “extreme paces” of rental price growth had now ended but they were still relatively high. Dr Powell estimates that Australia needs 40,000 to 70,000 more rental homes right now to balance the market. “This is a significant amount of rental stock needed to balance out the rental market today, and not taking into account future population growth and people arriving from overseas and people relocating,” Dr Powell said.

New CoreLogic data shows rental vacancy rates have fallen to new record lows of 1 percent across the combined capital cities and 1.2 percent across the combined regional markets. CoreLogic economist Kaytlin Ezzy said: “Record high net overseas migration, fuelled by a combination of an increased flow of new arrivals and weaker departure numbers, coupled with a continued shortfall in rental listings, saw the vacancy rates falling to new record lows.”

Byron Bay’s most compelling homes have always taken their cues from the climate. They open to the breeze, dissolve the boundary between inside and out and use tropical landscaping to create privacy without shutting out the natural world.

At 17 Kendall Street, those familiar coastal ideas have been elevated into something more architectural.

The five-bedroom residence is designed around a spectacular open-air courtyard, creating a private internal landscape where glass, stone, timber and water meet. Floor-to-ceiling glazing draws natural light into the interiors while framing the heated swimming pool and established tropical gardens from multiple points within the home.

The home was originally built in 2016, but underwent a major renovation last year following its $5.3 million sale in 2023. Sotheby’s Byron Bay agent Will Phillips has a $15 million price guide.

The transformation focused on both the home’s scale and its level of detail. Soaring voids and bold architectural forms create drama, but the material palette keeps the atmosphere warm. Rich timber, natural stone and handcrafted finishes temper the contemporary lines, allowing the residence to feel calm rather than imposing.

A sculptural spiral staircase forms the architectural centrepiece, connecting the home’s different spaces while providing a strong visual counterpoint to the horizontal lines of the courtyard and pool.

The planning is centred on connection. Multiple living and entertaining areas open to covered terraces, enabling the house to expand and contract according to the occasion. Smaller spaces support quiet family life, while the principal living zones and alfresco areas can accommodate considerably larger gatherings.

At the centre, the courtyard operates as more than an impressive arrival feature. It brings light and garden views deep into the plan, provides separation between the home’s different wings and creates a protected outdoor environment for year-round living.

Accommodation comprises five generously proportioned bedroom suites supported by five designer bathrooms. Their distribution through the residence gives family members and guests a greater sense of privacy, while the tropical outlook maintains a consistent connection between rooms.

Wellness Wing

The home’s most distinctive inclusion may be its dedicated wellness wing.

A private sauna, gym, Zen room and traditional Japanese soaking bath combine to create a retreat within the retreat. Rather than treating wellness as a single-purpose gym placed in a leftover room, the design gives it a dedicated sequence of spaces intended to support exercise, recovery and quiet.

The Japanese soaking bath is especially appropriate to the home’s broader architecture. Compact, deep and designed for immersion rather than conventional bathing, it complements the restraint of the Zen room and the calming views into the garden.

Outside, the heated pool and covered dining terraces provide the more social side of resort living. Tropical landscaping creates privacy around the residence, while the courtyard design allows greenery to remain visible throughout much of the interior.

Belongil Boom

The location adds another dimension to the property. Kendall Street sits near the Belongil side of Byron Bay, within walking distance of Belongil Beach and local dining including Belongil Bistro, Treehouse, Féu and the town centre’s broader collection of cafés, restaurants and boutiques.

That northern pocket is increasingly emerging as a prestige counterweight to Wategos and the tightly held Marine Parade strip at the opposite end of Byron Bay.

Much of the most visible investment has centred on nearby Border Street and the Belongil beachfront. Hospitality billionaire Justin Hemmes has assembled four residential holdings in the neighbourhood at a reported combined cost of about $45 million. His acquisitions include a beachfront holding bought for $16 million in 2023 and a subsequent creek-front purchase.

The Block judge and interior designer Darren Palmer and his husband, Olivier Duvillard, have also moved into the precinct, paying $4.2 million for an original home with creek views.

Luxury developer and builder GRAYA has made an even larger commitment. The Brisbane group acquired a substantial Border Street beachfront site for about $20.65 million in 2024, with plans for a major trophy-home project. Part of that holding was subsequently sold in a transaction that underlined how dramatically land values have moved.

The strongest evidence came from Chemist Warehouse director Damien Gance and his wife, Sasha Robertson. The couple paid $33.5 million in cash for the beachfront residence Malia, setting a Byron Bay house-price record and surpassing the $30 million sale of Watermark at Wategos in 2023. They then reportedly spent another $20 million securing the neighbouring vacant parcel, taking their combined Belongil investment to $53.5 million.

Those transactions do not make Kendall Street directly comparable with absolute beachfront property. They do, however, illustrate the growing weight of capital and attention shifting towards Byron Bay’s northern edge.

For decades, Marine Parade at Wategos has been the region’s clearest shorthand for trophy property. Border Street and the wider Belongil precinct are now building a comparable identity, supported by larger holdings, beachfront scarcity and an expanding concentration of prominent owners.

Property details

Address: 17 Kendall Street, Byron Bay, NSW
Location: Near Belongil Beach and Byron Bay town centre
Original construction: 2016
Last sale: $5.3 million in 2023
Renovation: Major renovation completed in 2025
Current price guide: $15 million
Bedrooms: Five
Bathrooms: Five
Key features: Central open-air courtyard, heated swimming pool, tropical landscaping and multiple indoor-outdoor living areas
Wellness facilities: Sauna, Zen room, gym and traditional Japanese soaking bath
Nearby: Belongil Beach, Belongil Bistro, Féu and Treehouse

Why the cost of renting a city apartment is now on par with houses

A perfect storm of changing demographics and construction delays is increasing demand in Australia

Wellness Wing

Belongil Boom

Property details