Available rental properties in inner Sydney dropped once again in February, according to the Real Estate Institute of New South Wales (REINSW).
The February vacancy rate survey saw the number of properties for rent in inner suburbs drop by 0.3 per cent, to 1.5 per cent.
“The falls have been most dramatic in the inner suburbs, hitting two-year lows,” REINSW president Malcolm Gunning said.
“The wider picture for Sydney highlights the need for investors to be encouraged to continue purchasing residential property.”
Overall vacancy rates fell by 0.2 per cent to 1.7 per cent, with middle suburbs dropping by 0.3 per cent to 2.0 per cent, and the outer suburbs down 0.1 per cent to 1.6 per cent.
“There is not enough stock available and this combined with the future threat of interest rate increases will see rises in rental prices,” Mr Gunning said.
However, recent development approvals could be an answer to the ever-tightening grip in the inner city.
Two large sites in Leichhardt will be turned into hundreds of houses, apartments and units, boosting the amount of available housing stock in this area of Sydney.
As a result, investors and homebuyers could see an improved level of affordability while being provided with a wide range of housing options to suit different needs and budgets.
Planning and Infrastructure deputy director general Stephen McIntyre also said approximately 13 of these units will be dedicated to affordable housing, giving lower income earners an opportunity to live in a thriving area with good amenities.
"A number of the buildings at the site are in poor condition and in a state of disrepair, while some are also vacant. The site revitalisation will benefit not only those who eventually live and work there, but the surrounding neighbourhood too,” he said.