NSW’s rental crisis rages on as vacancies remain at ‘historical’ lows

Despite signs of relief in vacancy rates in certain pockets of Sydney, the NSW rental market is not yet out of the woods, according to the state’s peak real estate body.

NSW Western Sydney aerial spi

The Real Estate Institute of NSW’s (REINSW) Vacancy Rate Survey results showed the portion of available rental accommodation across the region has risen by 0.3 per cent to 1.7 per cent over June.

While the rental market got some breathing room during the month, Tim McKibbin, the chief executive of REINSW, said its woes are far from over.

“While this does represent an increase in vacancies, we’re still experiencing historical lows in the availability of rental accommodation and the rental crisis remains firmly entrenched,” he stated.

During June, both the middle and outer rings of the harbour city witnessed an increase in residential vacancy rates, with both areas reaching a rate of 1.5 per cent, compared to their previous May rates of 0.7 per cent and 1.2 per cent, respectively.

Meanwhile, vacancy rates within the city’s inner ring, which had contributed to the uplift in last month’s figures, remained unchanged at 2.1 per cent.

Outside of Sydney, both the Hunter and Illawarra region saw declines in the number of available residential rentals over the month.

“In the Hunter region, the vacancy rate dropped by 0.3 per cent to 2 per cent. The Illawarra region also dropped, now sitting at 1.3 per cent (-0.5 per cent),” Mr McKibbin said.

While vacancy rates further tightened in some regional areas, there were also those areas that saw an easing during the month.

The Central Coast (from 1.7 per cent to 2.3 per cent), Mid-North Coast (1.1 per cent to 2.1 per cent), Northern Rivers (from 1.4 per cent to 3.3 per cent), Orana (from 1.5 per cent to 3.6 per cent), South Coast (from 2.2 per cent to 2.4 per cent), Riverina (1.1 per cent to 1.3 per cent), and South Eastern region (from 1.5 per cent to 2.6 per cent) all recorded a rise in vacancy rates over the month.

Meanwhile, vacancy rates tightened in Albury (1.5 per cent to 1.4 per cent), Coffs Harbour (from 2.6 per cent to 2.4 per cent), Murrumbidgee (1.5 per cent to 1.6 per cent) and New England (2.2 per cent to 2 per cent).

Drawing from anecdotes of agents operating in the state, Mr McKibbin described the rental market as “extremely tough.”

"In some areas, agents have a long list of pre-qualified tenants, but there’s simply not enough stock available to meet demand,” he stated.

And while there are areas with available properties, he highlighted rising rents and other cost-of-living pressures mean that tenants “simply can’t afford to move in.”

With demand for rental accommodation showing no signs of slowing down, he said the easing in the monthly vacancy rate is “no cause for celebration.

“The residential rental market is fluctuating, but three things remain certain: the availability of stock is at an all-time low, weekly rents are rising, and tenants are faced with ever-increasing living costs.

“None of these things are showing any signs of getting better – in fact, for many, they’re getting worse,” he concluded.

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