Sydney’s Rental Market Continues to Boom

Sydney’s property market is currently ripe for investors and landlords due to the continuing lack of supply in the rental market, suggests Sadhana Smiles, Chief Executive Officer of Harcourts New South Wales.

“Understandably, this is frustrating for tenants as it’s becoming increasingly difficult to secure a home. There are reports of large groups attending open homes, and this potentially could lead to the situation we had in Victoria a few years ago where tenants participated in mini auctions in order to secure a property,” Ms Smiles said.

Recent figures show that Sydney’s vacancy rate is the highest it’s been since August 2006 however it still remains below 2 per cent. Furthermore, there is an expectation that the vacancy rate will continue to tighten.

“January through to March is generally a peak period for rentals as people move for university and new jobs, so the current vacancy rate is a seasonal reflection.

“At this time of year, there is a significant demand for rental properties which is definitely outstripping supply. Once people settle into university and their new homes, these figures should start to settle down somewhat,” Ms Smiles said.

Ms Smiles suggests that the current market conditions are luring more investors than ever before.

“There are a number of cashed up investors who are taking advantage of consistent market values, lower vacancy rate and interest cuts. These investors tend to buy properties below $700,000 and are generally getting good returns,” Ms Smiles said.

Ms Smiles has identified some potential investment hotspots within Sydney.

“There is significant investment and infrastructure development in Greater Western Sydney that will assist growth and investment. Also, the rail link going into the Hills District will make a difference, encouraging investment and real estate activity,” Ms Smiles continued.