Sydney tenants on the hunt for a new rental have 62 per cent fewer properties to choose from than they did at the start of the Covid pandemic.
“It’s an incredibly staggering drop,” PropTrack economist Anne Flaherty said.
“The fact that we have seen such a large drop in such a short number of years really points to how much has changed in the market,” she said.
PropTrack data released Wednesday revealed Sydney recorded the sharpest drop in available rentals across the nations major cities last month. The vacancy rate is now 1.2 per cent.
![Long Lines Rental](data:image/svg+xml,%3Csvg xmlns="http://www.w3.org/2000/svg" viewBox="0 0 1280 720"%3E%3C/svg%3E)
Long lines of renters have been seen at recent inspections. Picture: Sam Ruttyn
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“A healthy vacancy rate is around 3 per cent so when it is around that 1 per cent mark it is highly competitive,” she said.
Ms Flaherty said during the pandemic, many tenants moved to regional areas, a trend that has reversed with more people moving back into the city’s suburbs.
Australia’s population growth has also hit record high levels, putting further pressure on the rental market.
“Sydney is one of the busiest cities for people to move to and new migrants are far more likely to be renters,” Ms Flaherty said.
A crowd is queuing up for an open inspection of a rental property located in Bondi. Picture: NCA NewsWire / Flavio Brancaleone
She said February is the busiest time of year for the rental market as increased levels of leases expire.
“One example is international students who have moved over and are looking in time for the semester to start,” she said.
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Lack of new stock hitting the rental market continues to limit availability.
“In 2023, new residential improvements fell to the lowest level in a decade,” Ms Flaherty said.
The areas that had the lowest number of available rentals was the Shire at a 0.65 per cent vacancy rate, followed by the Northern Beaches at 0.73 per cent and the Eastern Suburbs 0.9 per cent.
A two bedroom villa in Sutherland currently up for rent for $720 per week.
“When we see sub one per cent vacancy rates you can say that there is almost no stock available in those areas, so landlords can charge their own price,” Ms Flaherty said.
Sydney’s median rental price rises 16.7 per cent in 2023 to $700 per week.
Investor activity has also been low since the start of the pandemic as many investors exited the market.
High interest rates also have deterred investors from purchasing, but Ms Flaherty said first-home buyers may make a comeback in 2024.
“I think there is a cohort of renters who are in a position to buy … the cost of a mortgage is going to be similar or less than renting but of course property prices are more expensive too, so I think first-home buyers will have to compromise more on what they want in a property,” she said.
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