subject: Rental Crisis Worsens as Vacancy Rates Hit Six Month Low [print this page] Rental Crisis Worsens as Vacancy Rates Hit Six Month Low
The Real Estate Institute of New South Wales released data this week that shows the average citywide vacancy rate in Sydney and its surrounding suburbs has fallen to 1.1 per cent, creating the tightest rental market we have seen in over six months. As well as the continuing heightened demand for rentals in inner-city areas, regional areas are also suffering. In October, rental vacancies fell in seven out of eleven regional centers surveyed by the institute.
The institute's president, Wayne Stewart said "The situation will only continue to worsen as we enter 2011, when available rental accommodation will be further squeezed by growing demand from tertiary students seeking properties".
Wollongong was one of the regions mentioned with a lack of available rentals and the vacancy rate falling to just 1.6%. This is due to the high rate of owner-occupied dwellings and limited increase in new developments compared to population growth in the region. Vacancy rates have also dropped in inner suburbs of Sydney such as Redfern, where data showed that only 0.5 per cent of rental properties were empty in October of this year. Nearby Newtown showed rates of only 0.8 per cent.
The REINSW data shows the following results for Sydney Suburbs:
Inner suburbs (0-10km from CBD) fell 0.2% to 1.1%
Middle suburbs (10-25km from CBD) fell 0.2% to 1.2%
Outer suburbs (More than 25km from CBD) rose by 0.1% to 1.2%
Mr. Stewart argues that more action is needed by the NSW Government to provide more initiatives for individuals to invest in order to ease the burden on the government and the existing housing stock.
We need to see immediate action from the Keneally Government to break NSW out of the well-established rental crisis which has gripped the state,' said Mr. Stewart.
The existing state of the market has resulted in some tenants offering above market prices in order to obtain a home. As a follow on effect from the decrease in available rentals, the cost of rent has continued to rise this quarter and the Illawarra president of the Real Estate Institute Charles Hegyi says rents in the Wollongong region alone have increased about ten dollars a week over the quarter.
As always the decrease in vacancy rates and heightened demand continues to be great news for current investors who now have more financial security than ever. Furthermore, decreasing vacancies should act as a catalyst for potential investors who are looking for the right time to jump into the rental market.
