Key Highlights

  • Rents rose 3.6 per cent over the year to September and 0.2 per cent in the month.
  • That is slower than headline inflation of 4.3 per cent but still above the RBA's target band.
  • Over the same period electricity rose 12.8 per cent and fuel 23.6 per cent, adding to household costs.

Rents rose 3.6 per cent in the year to September 2026, a slower pace than headline inflation but one that still adds to the cost pressures renters face alongside higher power and fuel bills.

For Australia's renters, the monthly Consumer Price Index (CPI) is more than an abstract economic statistic. The rent component tracks what tenants are paying to keep a roof over their heads, and the September 2026 figures released by the Australian Bureau of Statistics (ABS) on 28 October 2026 offer a fresh snapshot.

According to the ABS, rents rose 3.6 per cent over the 12 months to September 2026. In the month of September itself, rents increased 0.2 per cent.

That annual rise is lower than the 4.3 per cent increase in headline CPI over the same period. But it remains above the Reserve Bank of Australia's (RBA) 2–3 per cent inflation target range, and well above the 2.5 per cent midpoint the RBA uses as its reference point.

A number that is easy to mix up

One quirk of the September release is worth flagging. The rent figure of 3.6 per cent happens to be the same as the trimmed mean, the ABS's measure of underlying inflation, which also rose 3.6 per cent over the year.

The two are entirely different measures. The rents figure tracks one specific category of household spending. The trimmed mean is a summary gauge of broad price trends across the whole CPI basket. Headline inflation, which covers everything, was 4.3 per cent, while the CPI excluding volatile items such as fuel and fruit and vegetables was 3.7 per cent.

For tenants, the practical takeaway is that rents are rising more slowly than prices overall, but not slowly enough to fall back within the range the RBA is aiming for.

Rent is only part of the tenant's bill

Renters typically cover more than their weekly or monthly rent. Utility costs are also part of the household budget, and the September CPI showed electricity prices up 12.8 per cent over the year. The ABS attributed that rise mainly to the end of Commonwealth electricity rebates.

Transport costs have also climbed. The Transport group rose 8.7 per cent annually, with automotive fuel up 23.6 per cent over the year and 9.4 per cent in September, driven by higher world oil prices.

The broader Housing group, which captures many of the costs associated with where people live, rose 5.2 per cent over the year. New dwellings rose 4.7 per cent annually and were unchanged in the month.

Put together, these figures help explain why many renters may feel the squeeze more acutely than the rent figure alone suggests. Governor Michele Bullock acknowledged that broader pressure at her media conference on 29 September 2026, saying: "Pay packets don't go as far as they used to, and that's why we need to stop this high inflation."

Where the housing market fits

Tenants often watch property prices for clues about the rental market. The RBA's latest commentary paints a picture of a cooling housing market.

In her opening statement to the Senate Economics Legislation Committee on 28 October 2026, Governor Bullock said housing prices have fallen in most capital cities and new housing loans have declined. She also noted that prices remain around 50 per cent higher than in early 2020.

Assistant Governor (Economic) Sarah Hunter told 60 Minutes, in an interview broadcast on 25 October 2026, that higher interest rates were slowing housing, as intended, and that tax changes from the May budget were also having an effect.

The RBA has been careful to point out what it is and isn't aiming for. Governor Bullock told senators that "monetary policy does not target housing prices." The Bank's goal is to return inflation to the 2–3 per cent target range, with the midpoint as reference, while giving some flexibility on timing to balance full employment.

Why the RBA says inflation hurts renters too, and the rate backdrop

Debates about interest rates often centre on mortgage holders, but the RBA has repeatedly stressed that high inflation affects all households. On 29 September 2026, Governor Bullock said: "high inflation hurts all Australians, especially the most vulnerable."

That theme carried into her speech at the University of New England graduation ceremony in Armidale on 23 October 2026. Describing a visit to a national debt helpline, she said: "It provided a very human perspective on the economy that you don't get from looking at aggregate data." In the same speech she said "the work of the RBA is about people."

For tenants, rate rises do not directly change their rent the way they change a variable mortgage repayment. The RBA's argument is that bringing inflation down helps preserve the purchasing power of household income, which matters to renters as much as anyone. As Ms Hunter put it in her interview: "We don't want to live with high inflation for a long time."

The RBA's Monetary Policy Board raised the cash rate target by 25 basis points to 4.60 per cent at its September meeting, effective 30 September 2026. It was the fourth increase this year, with the cumulative rise in 2026 reaching 100 basis points.

In its decision statement, the Board said "Inflation remains elevated and some of the upside risks flagged in August are materialising." It said it would be "attentive to the data and the evolving assessment of the outlook and risks", with options "including increasing the cash rate target further if needed".

The Board meets again on 2–3 November, with its decision due at 2.30 pm AEDT on 3 November 2026. That decision has not yet been made, and the Governor has said she will not provide forward guidance.

Renters who want to understand how the broader picture might affect them may find it worth following:

  • the monthly CPI rent component published by the ABS
  • the RBA's updated forecasts in its November Statement on Monetary Policy
  • electricity and fuel price movements, which have been major contributors to recent inflation

The bottom line

Rents rose 3.6 per cent in the year to September 2026, a slower pace than headline inflation of 4.3 per cent but still above the RBA's target band. For tenants, rent is only one part of the picture: electricity rose 12.8 per cent and fuel 23.6 per cent over the same period, adding to household costs.

The RBA has framed its fight against inflation as one that matters to all Australians, not just borrowers. As Governor Bullock told senators on 28 October 2026: "High inflation hurts everyone." What comes next for interest rates remains undecided until the Board announces its decision on 3 November.