Drop in vacancy rates ‘no cause for Christmas cheer’
The latest data reveals a decade-low rental vacancy situation is stirring in Sydney.
The Real Estate Institute of NSW (REINSW) Vacancy Rate Survey revealed there’s “no cause for Christmas cheer”, with CEO Tim McKibbin acknowledging that while vacancies have been trending downwards across the NSW capital over the last 12 months, “this latest result marks a new low, which is alarming”.
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“Heading into the festive season, we generally see an uptick in vacancies, as students vacate to head home and families start to make decisions about where they want to live in the new year,” he pointed out.
“The fact that rates are tightening rather than easing at this stage is cause for concern.”
Vacancies across all rings dropped across the month of November, with declines between -0.2 per cent and -0.4 per cent.
In Sydney’s inner ring, the rental vacancy rate is now 1.2 per cent – a drop of -0.4 per cent.
In Sydney’s middle ring, a 1 per cent vacancy rate is a drop of -0.4 per cent, while the outer ring is showing the most vacancies, albeit still at a concerningly low level of 1.4 per cent (a drop of -0.2 per cent).
According to Mr McKibbin: “These latest results paint a grim picture and show that there is little cause for optimism as we head into the festive season.”
Looking slightly out of Sydney, residential vacancies have remained more stable.
In the Hunter region, vacancy rates are sitting at 1.5 per cent, while the Illawarra area sees a 0.3 per cent lift to 2.4 per cent.
But even so, vacancy rates across regional NSW continue to remain low, as flagged by REINSW.
“Rates for the Central Coast, Central West, Coffs Harbour, Murrumbidgee, Northern Rivers, Orana, Riverina and South Coast areas all dropped in November 2023,” Mr McKibbin said.
Elsewhere, “the Albury, Mid-North Coast and South-East areas recorded slight increases, while the New England area remained stable”.
Taking a helicopter view of the data, Mr McKibbin conceded that the data “once again proves that NSW is in the midst of an extreme rental crisis, the likes of which we’ve not experienced in decades”.
He said: “Demand for rental accommodation certainly isn’t slowing, but the number of properties in the supply pipeline is, as cost-of-living pressures continue to force landlords to sell their investment properties.”
“The inevitable knock-on impact is fewer properties available in the rental pool.”
