Sydney rental vacancy rate at worst on record

Sydney’s available rentals have hit a shocking new low in what is the toughest time to be a renter in Sydney’s history.

Struggling renters are met with a new blow with no where to turn. Picture: Tim Hunter.

Sydney’s supply of available rentals has hit the worst level on record in another unwelcome blow to struggling renters.

There’s never been a tougher time to secure a rental property in Sydney.

New PropTrack data released Friday revealed the share of vaccant rental homes on the market dropped to just 1.11 per cent in February, an unprecedented low.

PropTrack economist Angus Moore said the shortage of vacancies at a time of rising tenant demand would make life difficult for tenants.

“The unfortunate reality is that we are probably going to continue to see pressure on rents and further affordability challenges, which is already the worst on record,” he said.

The low 1.11 per cent vacancy rate means there hasn’t been a harder time to be renter. Picture: Richard Dobson

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With February being a busy time for the rental market, the latest vacancy rate was 0.3 per cent lower than a year ago.

Mr Moore said vacancy rates in Sydney have continued to decline since 2020.

“This reflects very challenging availability for renters. Rentals are also leasing very quickly when they do become available,” he said.

Prior to the pandemic, rental properties would sit on the market for around 30 days, now they are getting snapped up in 20 days.

“The reason we are seeing the decline (in available rentals) is that there is lot of demand and not enough supply.”

Population growth and the lack of homes being built was two of the factors Mr Moore attributed to the “complex” impacts on low rental vacancy rates.

Fierce competition for rentals has meant prices have shot up. Picture: Flavio Brancaleone

“We are just not building the same amount of homes that we were between 2015-2019,” he said.

The pandemic caused challenges in sourcing materials and building costs have remained high post pandemic.

Mr Moore said these issues mean it takes longer to build a home than it used to.

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“We’ve also had a reasonable pace of population growth.”

Sydneys toughest areas showing little to no rental properties on the market was The Shire, Northern Beaches and the Central Coast.

Increased building costs have slowed new construction. Picture: Christian Gilles

“The differences between the tighter and the least tight markets are still not huge, pretty much all parts of Sydney are on the tight side,” Mr Moore said.

One way renters are coping with the rental challenges is turning to sharehousing.

“Flatmates.com.au just had its busiest month ever, which shows that people are looking for share housing and reducing how much rent they have to pay through that.”

Mr Moore said Sydneysiders may turn to other cities like Adelaide and Perth.

“They may be looking for more affordable markets. But even the more traditionally affordable markets are also experiencing challenges,” he said.

Announcements have been made to build more homes. Picture: NCA NewsWire/ Dylan Robinson

Perth and Adelaide had the tightest rental markets across the country, at 0.75 per cent and 0.83 per cent respectively.

“They do remain a bit cheaper than Sydney but they’ve seen growth in rents as a consequence.”

Regional NSW also remains challenging for renters, but there is slightly more rental properties available compared to 2021 when many chose to move out of the city during the pandemic.

National cabinet announced in July a goal to build 1.2 million new homes in the next five years.

“That hasn’t actually translated into more homes yet,” Mr Moore said. it’s a lot slower than what is needed to meet that goal.”

“The short answer is we need more homes. It’s the only way we can sustainably solve these issues.”

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Originally published as Sydney rental vacancy rate at worst on record