Rental Market Crisis Persists in New South Wales Despite Slight Fluctuations

The July 2024 REINSW Vacancy Rate Survey indicates that residential rental vacancies across New South Wales remain critically low. Although there was a slight increase in Sydney’s overall vacancy rate, rising by 0.1% to 1.8%, REINSW CEO Tim McKibbin emphasized that this figure still represents a historic low for the city. He noted that while this is the highest vacancy rate recorded in Sydney over the past year, the rental market is still in a state of crisis.

McKibbin pointed out that vacancies in Sydney’s Inner, Middle, and Outer Rings all saw slight increases last month, with rates at 2.4% (+0.2%), 1.7% (+0.1%), and 1.5% (+0.2%), respectively. He explained that minor month-to-month fluctuations are to be expected, but these increases do not diminish the ongoing rental crisis gripping the city.

The survey also revealed regional variations, with the Illawarra region experiencing a slight increase in vacancy rates while the Hunter region saw a decrease. Specifically, the Illawarra region’s vacancy rate rose by 0.2% to 1.2%, whereas the Hunter region’s rate dropped by 0.2% to 1.4%.

McKibbin highlighted that many regional areas in New South Wales witnessed further tightening in vacancy rates due to increasing demand and limited supply. Decreases were observed in the Central Coast, New England, Northern Rivers, Orana, Riverina, South Coast, and South East areas. Conversely, the Albury, Central West, Coffs Harbour, and Murrumbidgee areas recorded slight increases, while the Mid-North Coast saw no change.

Despite some easing in vacancy rates this month, McKibbin cautioned that this is not a reason for optimism. He stressed that three factors remain unchanged: the availability of rental stock is at an all-time low, weekly rents continue to rise, and tenants are facing escalating living costs. McKibbin concluded by underscoring that the challenges confronting the residential rental market in New South Wales remain significant and unresolved.

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