In April the vacancy rate in inner Sydney rose to 1.3% compared to the record-breaking low of only 1.1% a month earlier. Overall, vacancies in the Sydney metropolitan area stand at 1.4 percent. A figure below 2% indicates that supply is barely meeting demand.
“Although there is some improvement, it offers very little relief,” Mrs Castle said. “We know that people do want to invest in real estate, but a lot more needs to be done to encourage investors back into the market and take the pressure off supply.”
REINSW data shows that the availability of rental stock began to drop in 2005 when investors started pulling out of the property market, selling to owner-occupiers rather than other investors. Since September 2006 the vacancy rate has continued to decline, not rising above 1.6% in the Sydney metropolitan area.
“We saw this problem coming and it will take a while to turn around,” Mrs Castle said. “People need to achieve a reasonable return on their investment. When they can do this, they will come back into the market – which will take the pressure off supply.”
Vacancy rates in other urban areas of NSW also picked up in April. In Wollongong the vacancy rate rose to 2.9% from 2.1% in March and in Newcastle it increased from 2.1% to 2.5%.
REINSW compiles the only data on residential vacancies in NSW.
Residential vacancy rates in NSW:
|Inner (0-10km from CBD)||1.3||1.1||1.3||1.6|