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CEO AllenWargent Property Buyers, & WargentAdvisory (institutional). 6 x finance author.

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Tuesday, 20 September 2016

Sydney vacancy rates tighten again

Tighter again

If online listings are any guide, the rental market in Sydney has been tightening lately, with fewer rentals being advertised across a high number of suburbs.

According to the REINSW inner Sydney vacancy rates were unchanged in August at 1.9 per cent, but middle ring Sydney tightened by 0.3 per cent to 1.6 per cent, while outer Sydney's vacancy rate of 1.7 per cent was the lowest since November 2015.

Smoothing the figures on a 4mMA basis to nip out a bit of the noise shows that Sydney vacancy rates have been fairly flat over the past year in the middle and outer ring, but are some way tighter in the inner suburbs.

The vacancy rate in Newcastle has sneaked back up to 3 per cent.

The Tenants' Union (TU) Rent Tracker found that Sydney unit rents moved 5 per cent higher over the past year, while house rents were 3 per cent higher. 

Rents have moved sharply higher in Randwick and Woollahra over the past year according to the TU, but regional areas have been found to be "much more stable".

The TU believes that the CPI measures understate Sydney's rental price growth. Their long run data also shows Sydney rents rising much faster than inflation.

According to the TU over the last 20 years new rents have generally increased at an average of around 8 per cent across Sydney and 5 per cent across the rest of New South Wales.