No sign of relief for renters as vacancy rates drop

Residential vacancies across New South Wales remain at crisis levels, according to results from the Real Estate Institute of NSW (REINSW) Vacancy Rate Survey for October.

Some areas recorded rental vacancy rates of just one per cent, suggesting rents could be set to rise further as tenants compete for fewer properties.

In Sydney, the vacancy rate across the greater area remained at 1.8 per cent.

REINSW CEO Tim McKibbin said the rental market was “still in crisis”.

“While it’s pleasing to note that the availability of rental accommodation has not dropped across the greater Sydney area overall, it’s still too low,” Mr McKibbin said.

REINSW CEO Tim McKibbin, NSW real estate.

“Vacancies in both the Inner Ring of Sydney dropped by 0.2 per cent to 2.1 per cent, the Outer Ring rose by 0.1 per cent to 1.8 per cent and the Middle Ring remained at 1.4 per cent.”

The news comes as rental stress continues to remain high across Sydney, with 100 per cent of tenants in some suburbs feeling the strain of rent prices.

Vacancies were a mixed bag in the Hunter Valley, with Newcastle recording a rate of 2.1 per cent while the rate in regional areas sat at just one per cent.

Wollongong was also part of the one per cent club, while the rest of the Illawarra recorded a vacancy rate of 1.3 per cent.

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Sydney’s inner ring suburbs were the only ones in the city where vacancies increased year-on-year. Picture: NewsWire/Monique Harmer.

Elsewhere in NSW, Mr McKibbin said only four areas saw vacancy increases.

“Only the Albury, Central West, Orana and South East areas recorded increases,” he said.

“Vacancy rates in The Central Coast, Coffs Harbour, New England, Riverina and South Coast areas all decreased over the last month.

Mr McKibbin said “the story remains the same” for renters.

“Rental availability is spiralling downward as stock continues to diminish,” he said.

“It’s not hard to understand why those involved in the residential rental market feel so disheartened.”

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The vacancy rate in Wollongong now sits at just one per cent.

Mr McKibbin said while government acknowledges that we are in the midst of a rental crisis, their action to address supply is lagging.

“Supply in the residential rental market continues to diminish,” he said.

“There is simply not enough housing to cope with demand, and this is putting tremendous pressure on the rental market.”

SQM Research managing director Louis Christopher said the story was largely the same across the country.

“The national vacancy rate holding at 1.2 per cent suggests the rental market remains very tight, with little sign of meaningful supply increases,” he said.

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The vacancy rate in Newcastle has dropped by 0.6 per cent in the last year. Picture: iStock.

“While some capitals are showing temporary easing in rent growth, underlying conditions remain undersupplied, particularly in cities such as Perth, Adelaide, and Hobart.

“Overall, we expect rental conditions to remain tight through the summer months, with only a modest increase in vacancies likely in early 2026.”

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NSW VACANCY RATES OCTOBER 2024-2025 (per cent)

Source: REINSW.

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