Vacancy rates across Sydney and much of New South Wales have dropped this month, while the Inner Ring bucked the trend, experiencing its highest vacancy rate rise since June.
According to the latest REINSW Vacancy Rate Survey, Sydney vacancy rates dropped only slightly, following last month’s increase.
“Decreasing 0.1 per cent for the month, the vacancy rate for Sydney overall is now 3 per cent,” REINSW Chief Executive Officer Tim McKibbin said.
“Vacancies in Sydney’s Middle and Outer Rings also decreased to 3.1 per cent (down 0.8 per cent) and 1.8 per cent (down 0.4 per cent) respectively.”
In contrast, vacancies in the Inner Ring increased by 0.2 per cent to 3.9 per cent, the highest it’s been since June 2021.
“Many members are reporting that the residential rental market in the inner-city suburbs is suffering due to the lack of international students,” Mr McKibbin said.
“It will be interesting to see the impact that the opening of international borders has in the New Year, when we hope to see university students return for the start of a year of face-to-face learning.”
Outside Sydney, vacancies dropped significantly in Wollongong to 1 per cent, while in Newcastle, the number of available properties rose to 1.8 per cent, up 0.3 per cent.
Vacancy rates across much of regional NSW continue to remain low, according to the data.
“Rates in the Albury, Murrumbidgee, New England, Riverina, South Coast and South Eastern areas all dropped in September 2021,” Mr McKibbin said.
“Coffs Harbour remained stable for the month, while the Central Coast, Central West, Mid-North Coast and Northern Rivers areas each experienced a slight uptick in the availability of rental accommodation.”
The Orana area was a standout performer, according to the report.
“Made up of major localities such as Dubbo, Cobar and Mudgee, the vacancy rate increased by 0.7 per cent for the month to be 2 per cent – the highest vacancy rate for any regional area,” Mr McKibbin said.
“The impact of increasing vaccination rates and the further easing of restrictions is only just starting to trickle through to the residential rental market.
“It’s a case of ‘watch this space’ for the next few months – and we will be watching with great interest.”
According to CoreLogic Director of Research, Tim Lawless, there has been a preference shift towards lower density housing options during the pandemic, and the abrupt stalling in overseas migration has interrupted tenancy demand around key unit precincts.
“From the supply side, the unit sector has only recently emerged from an unprecedented influx of newly built unit projects where construction activity has been skewed towards the high-rise sector of the market,” Mr Lawless said in the latest Property Pulse Report.
“A large proportion of this newly built unit stock has been centred within the inner-city rental markets, especially Sydney and Melbourne.”
Since February this year the higher levels of inner city unit stock had reduced, according to the data, and by the end of October, the number of inner city unit rental listings had fallen to 55 per cent below pre-COVID levels and 68 per cent below advertised rental stock levels in January this year.
According to the report, one reason for the increased interest in inner city unit rentals was likely to be the price difference.
“Through COVID, renting an inner city apartment has become more affordable in raw dollar terms and in relativity to renting a house,” Mr Lawless said.
“While capital city house rents were up 10.1 per cent since March last year, unit rents remain 0.3 per cent below pre-COVID levels, with inner city unit rents generally down the most.”
In Sydney, renting an inner city unit is now -3.1 per cent, or about $21 per week, cheaper than it was in March last year.