Investors are starting to head back into the Sydney market, helping provide housing for
struggling tenants. This Sydney market update is provided by the founder of the top state-based buyers agency, Henderson Advocacy, Jack Henderson.
The latest data from PropTrack shows that the supply of rental properties has hit an 18-
month high in Sydney.
The vacancy rate is currently at 1.68%, which, while on the rise, is still incredibly tight by
historical standards. Typically, a vacancy rate of around 3% is considered a balanced
market.
The vacancy rate is up 0.51% compared to three months ago and 0.2% up from last month.
This marks the fourth consecutive month where conditions have eased for renters.
Rising vacancy rates come on the back of investors returning to the Sydney market.
PropTrack noted that many investors were cashing out of the market a year ago, causing the
supply of rentals to shrink.
While the trend hasn’t fully reversed yet, there are signs that investor sentiment is improving,
which will slowly relieve pressure on tenants.
With the large number of new people moving to Sydney each year, it’s unlikely that the rental
crisis will ease anytime soon, even with the influx of investors, according to PropTrack.
They stated that there would need to be a significant increase in the supply of new homes.
“We are not building enough houses and units to accommodate our growing population and
that’s the main reason rents are going up,” PropTrack said.
According to the ABS, lending to investors in NSW increased by about 20% over the year,
contributing to falling vacancy rates.
Despite this increase, rents in Sydney grew 8.8% over the year to July, down from the 14%
rise last financial year.
“The slight increase in vacancies has helped rents slow,” PropTrack said.
“It’s still a challenging rental market. Landlords have all the power, but rents are not going up
as fast as they were.”
Real Estate Institute of New South Wales (REINSW) data showed that demand for rentals
declined mostly in the inner and middle suburbs of Sydney.
They noted signs that tenants were seeking more affordable options in the outer suburbs.
PropTrack said rental conditions may ease further if more investors buy properties.
While vacancy rates remain below the key 3% threshold, investors should expect to see
steadily rising rents.
Are you looking for a property advantage? Contact a Henderson buyers agent today and stay informed every step of the way on real estate market trends in your desired location.
