Is Sydney’s rental squeeze facing the squeeze?

by Anne von Fehrn
If you have thought about moving, think again. According to new figures by the Real Estate Institute, people looking for rentals in inner Sydney are still doing it tough. Rental vacancy recorded in December 2008 remained tight at 1.3% in the inner city compared to 3.6% across Sydney.

‘It seems there are very few places coming on the market and those are often snapped up by the highest bidder,’ artist Chris Jones said. He recently moved into a studio in Potts Point but says it was harder than he’d expected. ‘I lived in Sydney five years ago and can definitely see that prices have gone up and that there is less supply.’

It’s not only the lack of supply that is forcing many to offer more than the asking price. According to findings by Australian Property Monitors, weekly rental prices in Sydney increased by 17% last year. But the gloom of the financial crisis might come to the rescue of renters in the very near future.
Australian Property Monitors predicts that landlords will find it difficult to increase rents in the inner city this year due to a slower economy. Spokesperson Liam O’Hara said that people will struggle to pay large rents, forcing them further out in more suburban areas. He said once couples have a situation where one income is missing, ‘then they have the option of venturing further out of the exclusive type of rental accommodation of inner Sydney.’
For many people renting is no longer a stable option and purchasing a property is more attractive since the Federal Government boosted the First Home Owners Grant. After years of renting, Surry Hills resident Alexx Cass finally decided to make the switch and bought a two-bedroom unit in a converted warehouse complex.

‘It’s not necessarily cheaper,’ he pointed out. ‘You are spending more per week but at least it’s not dead money.’ The 31-year-old sales director does not regret the sacrifice he has made. ‘When I come out at the end of it I come out owning my place,’ he said.

But if you don’t have the funds to buy your own way, try to hang in there. Property analyst Louis Christopher, of SQM Research, who compiled the data for the Real Estate Institute of NSW said things would get better. ‘I fail to see how there is a rental crisis in Sydney,’ Mr Christopher said. ‘The reality is that the number of available rental properties has been steadily rising since July 2007′ what rental crisis there was in Sydney is certainly coming to an end, in my opinion.’