Year-long rental drought for Sydney

Data just released by the Real Estate Institute of New South Wales (REINSW) shows that the August vacancy rate in Sydney overall was 1.5%, with the inner, middle and outer suburbs all recording vacancy levels below 1.8%. The situation was best in outer Sydney where the rate was 1.7% and worst in middle Sydney where the vacancy rate remained at 1.4% for the third month in a row.

“This situation is very worrying,” said REINSW President Cristine Castle. "Despite all the talk, there has been no action and no answers. And with other data showing a fall in new housing construction and a drop in housing loans, the supply of available property in a city such as Sydney with its ever-growing population is simply going to continue to worsen.”

Mrs Castle said that people are bracing themselves for further interest rate increases, which will further dampen the market and reduce the number of people investing in sorely-needed rental property.

“Investors need huge sweeteners to come back into the market,” she said. “It starts in our backyard – essentially we need the State Government to take the initiative so that supply can be matched with demand. If nothing happens, vacancy rates will stay historically low, rents will rise and people will continue to feel the pressure.” 

Residential vacancy rates in NSW:

  August
2007
July
2007
June
2007
May
2007
April
2007
SYDNEY 1.5% 1.4% 1.5% 1.3% 1.4%
Inner (0-10km from CBD)  1.5 1.4 1.7 1.3 1.3
Middle (10-25km) 1.4 1.4 1.4 1.2 1.2
Outer (>25km) 1.7 1.5 1.3 1.4 1.7
           
HUNTER 1.8 1.9 1.7 2.1 2.2
Newcastle 1.6 1.8 1.6 2.1 2.5
Other 2.3 2.0 1.8 2.1 1.7
           
ILLAWARRA 3.1 3.0 2.9 2.7 2.8
Wollongong 3.6 3.2 2.7 2.5 2.9
Other 2.4 2.8 3.6 3.7 2.6
           
Central Coast 3.2 4.6 3.5 2.6 3.3
           
Albury 2.5 2.8 3.2 3.3 2.6
Central West 5.1 4.0 5.0 4.8 4.3
Coffs Harbour 3.0 2.4 3.7 5.9 4.6
Mid-North Coast 2.9 4.0 3.6 3.9 3.4
New England 2.6 3.5 2.8 2.9 3.5
Northern Rivers 1.8 2.6 1.8 1.9 2.1
Orana 1.5 1.4 1.7 2.3 1.8
Riverina 2.2 6.2 3.9 3.4 3.5
South Coast 5.2 4.8 4.8 4.5 4.1
South Eastern 0.8 2.0 1.3 1.2 1.3

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of realestatesource.com.au.

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