Sydney’s rental housing shortage has exacerbated over the past month, with rental vacancies slumping to the lowest ever recorded.
With just 1.18 per cent of all rentals currently listed, city tenants now have about two thirds fewer available homes to choose from than they did during the start of the pandemic in 2020, according to PropTrack data.
The report showed the rental vacancy rate in Sydney dropped 0.11 per cent in September and had the biggest decline over the last quarter compared to the other capital cities.
PropTrack economist Anne Flaherty said the tighter market is putting pressure on rental prices.
“Declining vacancy rates are increasing competition for rentals and placing growing pressure on rents,” she said.
“As a result, rents are predicted to continue rising at above trend levels over the coming months.”
Across the country, vacancy rates dropped to new lows, dropping 0.06 per cent nationally.
Rental conditions were even tighter in Brisbane, Adelaide and Perth, where vacancy rates were below 1 per cent – a mark of severe rental shortages.
Ms Flaherty said more cities could follow suit. “More markets are expected to fall below 1 per cent over the coming year as demand continues to grow.”
The difference was that tenants in the smaller capitals had an easier route to homeownership than in Sydney, where housing affordability, measured by the gap between prices and incomes, was the worst in the country.
First-home buyers trying to escape Sydney’s rental market are looking at a median dwelling price of $1.05m, compared to $689,000 in Adelaide and $762,000 in Brisbane, according to PropTrack’s latest Home Price Index.
Rental vacancies were also plummeting in regional areas, with regional NSW only having a 1.22 per cent vacancy rate.
Resurgent population growth is contributing to pressure on rental vacancies.
Net overseas migration was reportedly over 454,000, close to double pre-pandemic levels of about 220,000 people.
The last quarter showed the highest national population increase on record, according to recent ABS data.
In the two years of pandemic-related disruption, the population increase through net migration was less than 2,000 people across both 2020 and 2021.
NSW’s population is seeing the biggest loss to interstate migration, according to PropTrack.
Taylor Troeth, Property Journalist