Sydney rental vacancies plummet to 16 year low as rents continue to rise

Sydney renters have been hit with the double whammy of a massive fall in vacancies and skyrocketing rents, with the worst of the housing crisis set to come.

Skyrocketing rents and slim pickings – the two attributes renters are facing as vacancies hit a 16 year low.

Investors selling off rental properties, the return of immigration and the recovery of short stay accommodation have resulted in a rental crisis that is expected to worsen alongside growing cost of living pressures.

The number of rental properties in Sydney remaining vacant for more than three weeks has halved in the space of one year, meaning significantly less choice for those looking for a home.

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At the same time, house rents have surged by more than 20 per cent with unit rents growing 14 per cent.

Sydney-siders view properties in Surry Hills for rent as prospective tenants are having difficulties securing rental properties. Picture: NCA NewsWire / Jeremy Piper

Data from SQM Research shows there were 11,914 vacant properties in Sydney in May this year, down from 12,758 in April and 21,936 in May 2021.

Vacancy rates, the percentage of properties sitting on the market for 21 days or more, had dropped to 1.5 per cent in Sydney and 1 per cent nationally.

SQM said the national figure was the lowest recorded in 16 years.

SQM managing director Louis Christopher said rental conditions would continue to worsen across the country.

SQM Managing Director Louis Christopher.

“There is nothing yet in the data that would suggest we are about to see a reprieve,” Mr Christopher said. “The national rental crisis continues on unabated and as a result, asking rents are skyrocketing.”

He said reductions in household size, the conversion of rentals into short stay accommodation and growing immigration had led to a tightening of available properties.

“There will also be ramifications for headline inflation once the Australian Bureau of Statistics update their rental series with the actual market.”

Buyers agent Grant Foley.

Buyers agent Grant Foley said investors selling their properties during Covid had put added pressure on the rental market.

“Many investors choose to take advantage of the rising market conditions to offload their holdings,” Mr Foley said.

“A number of investment properties in Sydney, especially houses in more affluent

areas, were sold to upgrading homebuyers, which means that it is nearly impossible

for families to find a house to rent in these locations at present.”

“We are expecting overseas migration to soar over coming years, compounding the

rental crisis, especially in Sydney, which is where the majority of migrants ultimately

arrive.”

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Originally published as Sydney rental vacancies plummet to 16 year low as rents continue to rise