Rents rose 5.2 per cent over the year, pushing the national median to $681 a week, property data firm Cotality revealed in its latest Quarterly Rental Review on Wednesday.
Since the outbreak of the COVID-19 pandemic, renters have experienced a dramatic deterioration in affordability.
The rental index has surged by 42.9 per cent over the past five years, amounting to an extra $204 per week to the median rental value, Cotality data shows.
The five years prior, rents increased by just 7.5 per cent or $33 per week.
After rising by 0.9 per cent in the three months to September, rents climbed 1.3 per cent over the December quarter.
The re-acceleration is bad news for renters, inflation and the outlook for interest rates, said Cotality research director Tim Lawless.
"There isn't really too much sign of any real alleviation in the scarcity of rental stock, which of course means there's this ongoing upwards pressure on rents," he told AAP.
Vacancy rates fell to 1.7 per cent nationally in December, down from 2.1 per cent a year prior and well below the pre-COVID decade average of 3.3 per cent.
Despite efforts to alleviate housing affordability, listings were down 11 per cent from a year earlier.
Rather than rental stock being offloaded by investors - property investor activity neared record highs in late 2025 - the tightening in vacancy rates was down to stock being absorbed by high demand, Mr Lawless said.
High dwelling values are making it harder for first home buyers to jump onto the property ladder, trapping them in the rental market for longer.
And despite a gradual decline in net overseas migration, immigration levels are still higher than pre-COVID.
Rates of new dwelling completions remain below the pre-pandemic decade average.
"So we're not seeing enough rental stock coming into the market at a time when demand is very high," Mr Lawless said.
Adelaide remained the tightest rental market in the country, with a vacancy rate of just 1.1 per cent.
Rents in the South Australian capital rose 3.4 per cent over the year.
The sharpest annual jump in rents was in Darwin, up 8.2 per cent, albeit from a lower base.
Melbourne experienced the softest growth, up 2.9 per cent, putting the median rent at $624.
Sydney, the country's most expensive market, rose 5.3 per cent to a median $817 a week.
Vaucluse, in the city's eastern suburbs, was the costliest suburb in the country to rent, with a house in the seaside enclave setting tenants back a cool $2310 a week.
Despite ongoing shortages, Mr Lawless expects rental growth rates to eventually run out of steam.
Households are spending more than a third of their pre-tax income on rent, on average, he said.
Stretched renters will increasingly be forced to rent out home offices or move back in with their parents to make ends meet, raising average household sizes and helping ease the undersupply of rentals.
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