Vacancy rates hit new low in Sydney
“The lack of available accommodation is making it increasingly difficult for tenants to move,” said REINSW President Cristine Castle. “Already we have heard stories of dozens of renters vying for properties in some areas where there are few places available.”
REINSW compiles the only data on residential rental vacancies in NSW. A figure below 2% usually indicates a tight rental market.
The vacancy rate fell to 1.5% for Sydney in December – the same level as October last year – even though December is traditionally a month when fewer tenants move.
Previous survey results showed that the inner city was under the most pressure, but now the low vacancies have spread across the Sydney metropolitan area.
The cause of the problem is simple: there aren’t enough people investing in property.
“With the sharemarket at record highs, superannuation and shares are becoming an attractive alternative,” Mrs Castle said. “But tenants cannot live in a share portfolio. We need people to invest in property so that families can have a roof over their heads.”
Investors were also turned off property by the short-lived vendor duty tax in NSW and the low rental yields of recent years. Rents are now on the rise again, but improving yields are unlikely to be enough on their own to reinvigorate property investment.
“One solution is to abolish land tax on residential property, which would remove a major disincentive for many people considering investing in bricks and mortar,” Mrs Castle said.
“REINSW is calling for the major political parties to adopt this policy in the lead-up to the state election in March.
“Otherwise, 2007 will be remembered in years to come as the year that the NSW Government sat on the sidelines and watched rents soar. Renters could ultimately suffer more than homeowners did from last year’s interest rate rises.”
