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Sydney’s rental market is facing a deepening crisis, with vacancy rates at historic lows and growing concerns that more landlords may be forced to leave the market.
The REINSW vacancy rate survey for May has revealed dire figures for Sydney’s residential vacancy rates, following new rental reforms which could push landlords to the brink.
REINSW CEO, Tim McKibbin, said that while Sydney’s residential vacancy rate rose by 0.1 per cent to 1.7 per cent, vacancies have consistently remained below 2 per cent, indicating an unbalanced market.
A healthy rental vacancy rate typically sits between 3 and 3.5 per cent, signalling a balanced market with sufficient property availability and minimal pressure on tenants or landlords.
Vacancies in the inner ring – including the local government areas of Ashfield, Botany Bay, Lane Cove, Leichhardt, Marrickville, Mosman, North Sydney, Randwick, Sydney, Waverley, and Woollahra – remained stable at 2 per cent.
Those in the middle ring – including Auburn, Bankstown, Burwood, Canterbury, Canada Bay, Hunters Hill, Hurstville, Kogarah, Ku-ring-gai, Manly, Parramatta, Rockdale, Ryde, Strathfield, and Willoughby – increased to 1.4 per cent.
Finally, vacancies in the outer ring – including Baulkham Hills, Blacktown, Blue Mountains, Camden, Campbelltown, Fairfield, Gosford, Hawkesbury, Holroyd, Hornsby, Liverpool, Penrith, and more – decreased to 1.6 per cent.
Total vacancies in the Hunter region saw a slight rise to 1.7 per cent from 1.4 per cent, while in the Illawarra total vacancies drastically rose to 2 per cent from 1.3 per cent.
In the other regional areas, data showed tight vacancies with drops recorded in Coffs Harbour, New England, Northern Rivers, Riverina, South Coast, and South East regions.
While Albury remained stable, vacancies in other regions eased slightly, with the Mid-North Coast and Murrumbidgee recording an increase of 2 per cent and 1 per cent, respectively.
Vacancies in the Central Coast and Orana, meanwhile, pushed over the 2 per cent mark at 2.3 per cent and 2.7 per cent respectively.
McKibbin deemed the lack of sufficient improvement in vacancy rates in the past few years a “real concern”, and argued the state’s recent rental reforms won’t help the matter.
Since 19 May, the NSW government has rolled out a host of reforms, including a no-ground eviction ban and making it easier for tenants to keep up to four pets.
“So many REINSW members are telling us that landlords are considering whether they will exit the market in favour of other investment options – and the recent rental reforms will certainly do nothing to stem this flow,” McKibbin said.
“Instead, the reforms will only serve to make investment in the residential market more unattractive for current landlords and new investors alike.”
McKibbin said a change is needed statewide, as this month’s vacancy rates continue to highlight that the residential rental market is “in crisis”.
“And with the latest rental reforms now in effect, the worst may be yet to come as landlords decide whether to exit the market,” he said.
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