By STEFAN BRADLEY
RENTERS in Gippsland have more choice than regional Victoria as a whole in finding a place to live, with vacancy rates increasing over the past few months close to a healthy rental market.
The latest realestate.com.au Market Insight into Vacancy looks at the regional markets in all six states plus regional Northern Territory (seven markets), as well as capital cities in all states and territories (eight markets).
Across the 15 total markets, regional Victoria was tied with Canberra for the highest vacancy rate at 1.9 per cent. This marks a 0.2 per cent lift over the month for the regional area, and 0.3 per cent rise over the July quarter.
Annually, regional Victoria recorded the highest lift of all markets, alongside Canberra, up 0.6 per cent in July.
Stats provided to the Express show more vacant homes in the Latrobe-Gippsland statistical area level 4 (SA4) – which includes Wellington – in July than there were a few months ago in April, and even more so than July 2025.
In good news for local renters, in July of this year Gippsland’s vacancy rate rose to 2.6 per cent. The rate was reported to be 2.3 per cent in both April and June. In July last year, it was 1.6 per cent.
“While vacancy in regional Victoria and Canberra are higher compared to the other regional and capital city markets, they are still slightly below the level considered a healthy vacancy rate,” senior economist for realestate.com.au, Anne Flaherty told the Express.
“Both cities have seen a slight increase in the number of vacancy properties over the month.
“Vacancy in the Latrobe-Gippsland region has been even higher, rising from 2.3 per cent to 2.6 per cent over July.”
A healthy vacancy rate is considered to be in the range of about three per cent, or a more broad range of 2.5-3.5 per cent, which would only just have Gippsland’s rental market in a healthy range. Most of the country is not faring as well, despite slight positive signs.
Despite the growth, the report suggests reprieve for renters is expected to be short lived, with the changes made in May’s federal budget on negative gearing and capital gains tax poised to tighten supply, placing an upward pressure on rents.
“Choice for renters improved in July, with the volume of available rentals up in every capital city and regional area compared to three months ago. While vacancy rates have increased, they remain well below the 2.5-3.5 per cent level considered to be a balanced market,” Ms Flaherty said.
“Vacancy rates remain particularly tight in many of Australia’s smaller capitals, with the lowest levels of rental supply recorded in Hobart, Darwin, Brisbane, and Perth. Canberra, Melbourne, and Sydney recorded the highest vacancy levels amongst the capitals in July.”
Ms Flaherty said in the 12 months to June 2026, the number of new loans to investors was tracking at the highest level seen since the Australian Bureau of Statistic began reporting this data in 2019.
“That surge in investors is likely behind the recovery in vacancy rates this year. However, this trend is now likely to reverse following the reduction in tax concessions for investors as part of the May budget. This is expected to lead to a slowdown in the rate at which new rental supply is added moving forwards,” she said.
Asked when this trend in the vacancy could be expected to reverse, Ms Flaherty told the Express at this stage it is “too early to predict if and when the recovery in the vacancy rate will reverse”.
“There are clear signs investor demand is slowing which will slow the pace of new rental supply. On the other hand, reduced investor participation is likely to drive an increase in the numbers transitioning from renters to owner occupiers. Migration levels will also play into the story, particularly with growing political pressure to reduce numbers,” she said.
Compared to five years ago, regional Victoria’s vacancy rate is sitting at one percentage point higher. Nationally, vacancy rate growth in regional areas (+0.5 per cent) outpaced that of capital cities (-0.8 per cent) over the last five years, driven by the increased demand for regional areas during the pandemic. But both combined markets saw vacancies sit at 1.5 per cent in July 2026.
The entire country’s housing crisis does not look to be slowing down, with the figures showing a vacancy rate of 1.5 per cent for ‘regional areas’, ‘capital cities’, and ‘national’ – exactly the same number across all three.
