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Sydney’s rental vacancy rate has now risen to 1.7 per cent, thanks to higher vacancy rates across Sydney’s inner and middle suburbs.
The latest data from the Real Estate Institute of NSW (REINSW) has shown that despite the increased demand across Sydney, the availability of rental accommodation is still “critically low” in Sydney’s outer rings and within the regions.
CEO of REINSW, Tim McKibbin, noted vacancies increased in both the inner and middle rings to be 2.2 per cent (+0.6 per cent) and 1.6 per cent (+0.4 per cent) respectively, while the outer ring decreased by 0.2 per cent to be 1.3 per cent.
He said that “while the demand for rental accommodation remains critically high, shifting patterns indicate that tenants are fleeing the inner city and moving further out, thus intensifying pressure on the outer rings and beyond”.
Acknowledging the fluctuating state of the state’s rental markets, McKibbin said multiple issues continue to plague the sector, including “record-low availability of rental properties, [and] rising weekly rents continuing in many parts of the state, particularly on the outskirts of Sydney and in the central western areas of NSW”.
“REINSW members across New South Wales report ongoing challenges in the rental market,” he continued.
“Despite having many pre-qualified tenants, agents in certain areas struggle with a severe shortage of available properties.”
Areas struggling with extremely low rental vacancy rates include the Illawarra area, where the vacancy rate is now sitting at 1 per cent – a drop of -0.3 per cent.
McKibbin flagged that “the Central West (1.8 per cent), Riverina (0.7 per cent), Murrumbidgee 0.9 per cent), Northern Rivers (1.1 per cent) and South East (3.3 per cent) areas each continue to experience a very tight rental market”.
Elsewhere, the rental crisis looks to be lessening, which the REINSW has attributed to new developments and a slight decrease in tenant interest.
The Hunter region saw an improved vacancy rate of 1.6 per cent, off the back of an improvement to the Newcastle area, which now sits at 2.2 per cent.
“Vacancy rates for the Central Coast (2.5 per cent), Coffs Harbour 1.5 per cent), Mid-North Coast (1.5 per cent), New England (1.5 per cent), and the South Coast (3.5 per cent) areas each recorded increases,” McKibbin said.
Even where vacancy rates do appear to be improving, McKibbin said “significant challenges remain”.
“The long-promised stage three tax cuts which began on 1 July as well as the upcoming federal government energy rebate will provide some respite for households, but the question remains whether these measures will be sufficient to alleviate the pain of price hikes in a market that sees no end in sight in the high demand for properties?” he queried.
ABOUT THE AUTHOR
Grace Ormsby
Grace is a journalist across Momentum property and investment brands. Grace joined Momentum Media in 2018, bringing with her a Bachelor of Laws and a Bachelor of Communication (Journalism) from the University of Newcastle. She’s passionate about delivering easy to digest information and content relevant to her key audiences and stakeholders.
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