Sydney landlords might need to offer more flexible asking prices for rentals as vacancy rates rose in all metropolitan areas of the city.
Vacancy rates were up 0.2 percentage points to 3.2%, according to Real Estate Institute of New South Wales’ (REINSW) vacancy rate survey for December.
The increase was driven by Middle Sydney, where vacancy rates jumped 1.6 percentage points to 5.1%, as well as Inner Sydney, where the vacancy rate rose 0.5 percentage points to 3.0%. Outer Sydney, which climbed 0.3 percentage points to 3.3%, also contributed to the upward trend.
“Our feedback from agents suggests that the market is being flooded with new units, making older units more difficult to rent,” REINSW President Leanne Pilkington said.
As a result, agencies have had to resort to tactics including decreasing rent prices and offering free rent periods to be able to sign up tenants.
The survey showed that vacancy rates in Hunter rose 0.3 percentage points to 1.9%, with Newcastle up 0.1 percentage points to 1.9%.
Wollongong’s vacancy rate, meanwhile, held steady at 2.7%. Other areas in the Illawarra bucked the trend, dropping 2 percentage points to 1% and contributing to an overall decline of 1.2 percentage points to 1.5%.
Markets in regional areas are also in a better position compared to metropolitan areas. While Central Coast jumped 0.1% to 20%, Albury fell 0.4 percentage points to 2.2% and New England dropped 0.1 percentage points to 1.9%.
These results support CoreLogic’s recent report indicating that Sydney is set to be dethroned as the most expensive city in Australia to rent a house. This is because of rising property supply that pressures more landlords to cut their rental rates.
