NSW vacancies remain at ‘crisis levels’ ahead of rental reforms
While the latest data shows that rental availability continues to tighten across NSW, the state’s peak body has warned that upcoming rental reforms could strain the vacancy rate even further.
The Real Estate Institute of NSW’s (REINSW) Vacancy Rate Survey for April 2025 showed that residential vacancies broadly decreased across NSW, with rental availability in Sydney dropping to their lowest level in almost a year.
The institute said that vacancy rates are currently hovering at “crisis levels”, with REINSW CEO Tim McKibbin noting that the “number of properties available to rent keeps diminishing”.
Sydney residential vacancy rate tightened by 0.4 per cent over the month to just 1.6 per cent, which is the city’s lowest level since May 2024, when a vacancy rate of 1.5 per cent was recorded.
Within Sydney’s inner ring, the number of properties available to rent decreased by 0.9 percentage point over the month and constricted the vacancy rate to now be 2 per cent.
Similarly, available rentals in Sydney’s middle ring, including Auburn, Bankstown, Burwood, Canterbury, Canada Bay, Hunters Hill, Hurstville, Kogarah, Ku-ring-gai, Manly, Parramatta, Rockdale, Ryde, Strathfield and Willoughby, dropped by 0.4 per cent over April to a vacancy rate of 1.1 per cent.
Rental conditions slightly eased within suburbs in Sydney’s outer ring, such as Baulkham Hills, Blacktown, Blue Mountains, Camden, Campbelltown, Fairfield, Gosford, Hawkesbury, Holroyd, Hornsby, Liverpool, Penrith, Pittwater, Sutherland, Warringah, Wollondilly and Wyong, and increased the vacancy rate by 0.1 per cent to now be 1.7 per cent.
Outside Sydney, residential rental vacancies in Illawarra region remained stable for the month at 1.3 per cent, and additionally held steady in the Hunter region at 1.4 per cent.
Despite the wide decreases, the number of rental properties in the regional areas of Albury, Coffs Harbour, Mid-North Coast, Murrumbidgee and South East rose during April, with the vacancy rate in the New England area notably easing by 1.9 per cent to now be 3.6 per cent.
Vacancies, however, tightened in many markets across regional NSW, with drops being observed in Central Coast, Central West, Orana, Riverina, the South Coast, and most significantly in the Northern Rivers area where rental availability tightened by 1.5 per cent over the month to a vacancy rate of just 0.6 per cent.
McKibbin said that the drops in vacancy rates across NSW were a “real concern” and emphasised that the state’s rental conditions stem from the shortage of available rental properties.
“REINSW members continue to tell us that the rental market is extremely tough, because there is simply not enough housing to cope with demand. This is putting tremendous pressure on the rental market,” McKibbin said.
Ahead of the NSW government’s upcoming rental reforms that come into effect on 19 May 2025, McKibbin warned that the new rental laws could further hasten the exit of landlords from the state and see rental availability plummet to even lower levels.
“This month’s vacancy rates highlight that the rental market is in crisis, but it may very well be the calm before the storm as we brace ourselves for the impact of these rental reforms,” McKibbin concluded.