Last month's floods in the Hunter Valley have had a significant impact on the availability of rental property in Newcastle and surrounding towns, with the vacancy rate for June declining to 1.7% compared to 2.1% in May.

The Real Estate Institute of New South Wales has applauded property initiatives announced in the State Budget including the reduction of land tax from 1.7% to 1.6% and the bringing forward of the abolition of mortgage duty to September 1, 2007.

Vacancy rates for Sydney rental properties showed little pick-up in May, giving tenants no respite from the lack of available accommodation in the city.

The stagnant state of Sydney's housing market is evident in the first quarter 2007 property data just released by the Real Estate Institute of New South Wales.