NRAS ended on 30 June 2026. Over the past decade, more than 35,000 dwellings that were required to rent at 20% below market have exited the National Rental Affordability Scheme. The affordable end of an already-tight rental market just permanently shrank.
What Was NRAS?
The Rudd government launched NRAS in 2008 to increase affordable rental supply. Investors who built or supplied a dwelling and rented it to low-to-moderate income tenants at 20% or more below market rent received an annual government incentive in return.
In the final year of the scheme (2025-26), that incentive was worth $13,261 per dwelling. Of that, $9,946 came from the Commonwealth as a refundable tax offset, and $3,315 from the relevant state or territory (ATO, DSS).
Each allocation ran for 10 years. The Abbott government cut funding for new allocations in the 2014-15 Budget, and no new dwellings were approved after 2016. Properties started exiting from 2018, and the last batch rolled off on 30 June 2026.
35,000 Affordable Rentals, Gone
By April 2015, 26,234 eligible dwellings had been delivered into the scheme (ANAO). Over the full life of the program, more than 35,000 affordable rental homes have now phased out (The Conversation).
The bulk of exits happened between 2022 and 2024, when more than 22,000 properties left the scheme. The final 3,600 exited in June 2026.
Queensland held the largest share at 10,427 allocations, or 27% of the total. NSW had 18%, Victoria 16%, Western Australia 14%, South Australia roughly 10%, ACT 6%, Tasmania 4%, and the Northern Territory 3% (ANAO).
The profile of the stock matters for investors. More than half of all dwellings in the scheme were apartments or studios. Two-thirds were two bedrooms or smaller (The Conversation).
Every one of these properties was required to charge rent at 20% or more below the local market rate. That requirement no longer exists. Owners can now set full market rent, and most will.
A Market Already Running Tight
NRAS properties hitting market rent would be manageable if the rental market had slack. It doesn’t.
Australia’s national residential vacancy rate was 1.3% in June 2026, with just 39,229 vacant dwellings across the country (SQM Research). SQM treats around 3% as a balanced market. Every capital city is below 2%.
Perth recorded 0.6%. Adelaide and Hobart sat at 0.7%. Brisbane was 0.9%. Darwin had just 0.3%, with only 64 vacant rental properties in the entire city. Even Sydney and Melbourne, the two most expensive capitals, were at 1.6% each (SQM Research, June 2026).
National rents grew 5.9% in the year to June 2026, with the median advertised rent reaching $705 per week (Cotality). As of March, renters were already spending a record 33.1% of gross household income on rent. Over the five years to June 2026, sustained rental growth has added roughly $204 per week to typical household costs.
Into this market, 35,000 former below-market rentals are repricing. That doesn’t add a single new dwelling to the rental pool. It just removes the discount on existing ones. The affordable end gets tighter, and tenants who were paying 20% below market either absorb the increase or compete for other affordable stock that barely exists.
Should You Buy Ex-NRAS Stock?
Some NRAS investors are selling now that the incentive has gone. The loss of $13,261 per year changes the cash flow equation, and for investors who were relying on that payment to stay positive, selling makes financial sense.
Queensland’s government has committed to buying roughly 1,300 ex-NRAS properties through community housing partnerships (QLD Government). That absorbs some supply but leaves thousands of other dwellings potentially on the market.
Should you buy them? Mostly, no.
The typical NRAS property is a small apartment or studio in a medium-to-high density development. More than half were apartments. Two-thirds were two bedrooms or smaller. These are exactly the type of properties that tend to underperform on capital growth because growth comes from land value, and apartments have very little of it.
High-density apartments in areas with oversupply are a poor foundation for any portfolio. You might pick up decent yield on paper, but weak growth means you never build the equity needed to buy again. The whole point of building a portfolio is compounding equity through growth and reinvesting it. An apartment that returns 5% yield but only grows at 2% per year won’t get you there.
The rare exception would be an ex-NRAS house on a decent block in a suburb with tight supply and strong fundamentals. That profile exists but is uncommon among the former scheme stock.
If you’re considering one, ask three questions. Is it a house or a unit? What’s the land component of the purchase price? And how many similar units sit in the same complex competing for the same tenants? If it’s a unit in a building with 50 others, you’re buying a commodity, not an asset that compounds.
What NRAS Ending Means for Rental Yields
The end of NRAS reinforces a trend already running hard. Rental yields in affordable markets keep strengthening, and the structural tailwinds behind that trend just got stronger.
Darwin recorded the highest annual rent growth of any capital at 9.2% in the year to March 2026. Perth and Brisbane both hit 6.7%. Regional areas outpaced the capital cities at 6.0% nationally (Cotality Q1 2026).
Population growth is outrunning new supply. Building costs remain high. And the scheme that kept tens of thousands of rents below market is now gone. No like-for-like replacement has been announced - the Housing Australia Future Fund and build-to-rent tax incentives target new supply, not discounts on existing stock.
For investors focused on both growth and yield, the playbook hasn’t changed. Established houses in affordable markets with low vacancy and strong population growth remain the strongest combination. Not premium blue-chip suburbs. Not apartments in oversupplied towers. Older houses on decent blocks where you can renovate, add value, and hold in a market where tenants compete for your property rather than the other way around.
NRAS ending doesn’t create a new opportunity. It removes one of the few remaining forces that were holding rents down at the affordable end. The market remains exceptionally tight by historical standards, and the yield case for well-located established property stays strong.
Why NRAS Ending Matters If You’re Waiting to Buy
NRAS is done. More than 35,000 properties that were priced below market are repricing, and no new affordable rental supply is filling the gap.
If you’re sitting on equity and considering your first or next investment property, the rental market fundamentals are moving in one direction. National vacancy is at 1.3%. Rents are growing at close to 6% annually. And the pool of affordable rental stock just permanently contracted.
Waiting for the rental market to ease hasn’t worked for five years. Vacancy ticked up marginally through mid-2026, but SQM still describes the market as exceptionally tight by historical standards, and NRAS ending pushes the affordable end the other way. Every quarter that passes, rents climb and entry prices follow. We covered why time in market matters more than timing in our guide to building a property portfolio.
If you want to talk through what the numbers look like for your situation, book a free call.
This is general information only and not financial advice. Speak to a qualified professional before making investment decisions.
Sources:
- ATO - NRAS taxation issues
- DSS - National Rental Affordability Scheme
- DSS - NRAS incentive indexation
- ANAO - Administration of NRAS
- The Conversation - NRAS has ended
- SQM Research - Residential vacancy rates
- Cotality - Rental Review Q2 2026
- Cotality - Rental Review Q1 2026
- QLD Government - Affordable housing purchase
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