Sydney rental crisis: “Staying put is better than braving the fight”

Nine-year-low in Sydney vacancies shows rental crisis isn't easing

Residz Team 3 min read

Cover image for Sydney rental crisis: “Staying put is better than braving the fight”

Sydney may be in the Top 10 Happiest Cities in the World list but renters there are unhappy with the news that rental vacancies are at a nine-year-low.

The most recent REINSW Vacancy Rate Survey results show that residential vacancies in Sydney are at their lowest level since November 2013.

“The vacancy rate for Sydney overall dropped 0.3% for the month to just 1.5%,” Real Estate Institute of NSW CEO Tim McKibbin said. “This 9-year low in Sydney vacancies is proof that the

rental crisis is showing no signs of abating.”

Tim says many tenants are choosing to stay in the rental properties past the point where the property is suitable for their needs.

“They see it as a better option than braving the current fight to secure a new rental property,” he says.

“Demand for rental accommodation across Sydney is at an all-time high. Many REINSW

members simply have no available properties on their rent rolls. Others that do are

reporting that properties are being snapped up immediately.”

In a press release, Tim McKibbin said REINSW members across New South Wales were telling the institute that they’ve never experienced a rental market like this.

“The availability of stock in the rental market 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, they’re getting worse.”

Indeed, as this chart (below) from Domain shows, the steep rise in rental prices will be squeezing tenants who are lucky enough to secure a property.

A report just in from CoreLogic has concluded the rental market has “arguably sustained the most significant and lasting change from the pandemic.”

“Cumulative growth in rent values since the onset of the pandemic nationally is 23.1%,” it says.

“This is likely to have come as a shock to long-term renters, where annual growth in rent values averaged just 2.1% nationally throughout the 2010s.”

According to Nine News, the pressure of rent rises like these in Sydney is causing a worker shortage. Close to half of businesses cited housing as a problem in attracting staff, it claims.

It says Business NSW released an analysis showing in 82 of Sydney's postcodes, a single tenant needed to make at least $100,000 a year to avoid being in housing stress (housing stress is defined as spending more than 30% of income on rent or a mortgage).

According to The Canberra Times, Canberra's house rents are at record highs but the pace of growth has slowed.

"While Canberra is the most expensive, it also has a higher average wage. That, in itself, helps lift rental prices," said Domain chief of research and economics Dr Nicola Powell in the article ‘Canberra House Rents Hit New Record High But Pace of Growth Slows: Report.’

Meanwhile, City Hub Sydney says Sydney rent prices have recorded their steepest annual growth, with the rent for houses jumping up by 12.1% and units increasing by 18.6% respectively.

The REINSW Rental Listings report shows Albury and Mid-North Coast are particularly difficult areas to secure a rental. Vacancy rates in February 2023 were under 1%. New England and Wollongong were just 1.1% and the Riverina and middle-Sydney were as low as 1.2%.

As Mr McKibben says, something has to change.

“All stakeholders agree that increased investment in the sector is the only solution, but the current strategy is to constantly erode the rights of landlords,” he says.

Research and Reduce Real Estate Stress with Residz

Residz can help buyers and sellers reduce the stress:


sign of abating

Photo by Dan Freeman on Unsplash