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As Australia grapples with a housing crisis, the latest data shows it's worsening.
The vacancy rate is the percentage of all available units in a rental property that are vacant or unoccupied at a particular time.
The lower the rate, the harder it is to find accommodation.
Rental vacancy rates decreased slightly in July, down 0.04 percentage points to 1.43 per cent, according to PropTrack's August Market Insight report.
Sydney saw rental conditions deteriorate in July, with vacancy rates falling 0.09 percentage points to 1.65 per cent.
Melbourne's rental vacancy rate held steady at 1.41 per cent in July. However, it is sitting 0.82 percentage points lower than 12 months ago — the largest annual drop of any capital city.
Brisbane's rental vacancy rate was largely unchanged over the month, rising just 0.01 percentage point to 1.15 per cent in July.
Adelaide and Perth continue to see the tightest rental market conditions, with vacancy still sitting below 1 per cent in these cities.
Regional areas also saw the supply of rental properties fall over July, with the vacancy rate dropping 0.04 percentage points to 1.51 per cent.
"Both capital cities and regional areas saw the supply of rental properties decrease over July," PropTrack economist Anne Flaherty said.
"Melbourne has seen the sharpest decline in rental vacancies of any market over the past 12 months.
"As Australia's fastest-growing capital city, vacancy is likely to fall further in Melbourne and lead to higher rents.
"While vacancy rates in regional areas fell over July, they remain above the levels seen 12 months ago in every state, with regional NT and Tasmania seeing the biggest jump in availabilities.
"This suggests a slowdown in the trend towards regional living that accelerated during the pandemic.
"Although, pressure is unlikely to ease any time soon for tenants, with the number of vacant properties predicted to remain at extremely low levels over at least the next 12 months."
"The cost of renting is likely to increase further for Australia's tenants in the months ahead, with the national vacancy rate falling in July."
Economists say the new data does not bode well for Australia's cost-of-living crisis.
"Continuing low vacancy rates mean higher rental prices into the future," Impact Economics and Policy lead economist Angela Jackson told The Drum.
"Lower rental vacancy rates are bad news for renters and reflect fewer rental properties coming to market.
"It's incredibly difficult to find a home.
Dr Jackson said renters were also likely to face overcrowding in housing if they did find accommodation.
"We need to use the existing stock of housing we have now better … to turbocharge the supply of housing into the rental market."