Sydney's vacancy rates on the rise

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Sydney's tight rental market is showing some signs of easing, with monthly vacancy rates showing an increase of as much as 0.5% in some areas.

The latest Real Estate Institute of NSW (REINSW) figures show that vacancy rates in the city increased by 0.2% overall, rising from 0.9% in May to 1.1% in June.

The ring of suburbs within 10km of the CBD saw the biggest increase in vacancy rates during June, jumping by 0.5% from 0.9% to 1.4%.

The middle ring of suburbs within 10-25km of the CBD saw the second biggest increase in vacancy rates, rising by 0.3% from 0.8% to 1.1%.

Meanwhile, suburbs 25km or further away from the CBD saw a slight increase of 0.1%, rising from 0.8% in May to 0.9% in June.

However, with the citywide figure only rising just above the 1% mark, REINSW president Steve Martin said he believes the state government must do more to ease the city's rental crisis.

"Every week that the NSW government avoids making a decision to remove land tax and stamp duty is another week that an additional 1,400 people arrive on Sydney's doorstep looking for a home," said Martin. "There's only so much slack before the rental accommodation rubber band is going to snap."

Pointing to monthly vacancy rate declines in areas outside of the state capital, Martin believed that "isolated improvements won't even make a dent in the rental crisis which is gripping the state".

Newcastle, Wollongong and the Central Coast saw vacancy rates drop by 1.3%, 0.7% and 0.9% respectively, leaving none of these three areas with a vacancy rate higher than 2%.

"The latest figures show a complete reversal of the improvement seen in regional areas in May, with the June data showing rental vacancies on the decline in Newcastle, Wollongong and the Central Coast," said Martin.

"Rental vacancies are firmly entrenched in the low single digits, yet the state government does nothing to encourage new investment. We need action from the government to reverse the downward spiral which is now a permanent feature of these figures."

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