Rental vacancies across most of New South Wales rose in January, according to a recent report by the Real Estate Institute of New South Wales (REINSW).

Sydney’s vacancy rate grew by 0.5%— up from 3.2% in December to 3.7% in January. Inner Sydney and Outer Sydney posted modest increases, while vacancies in Middle Sydney declined by 0.9% to 4.2%.

Sydney’s middle ring, which includes Parramatta, Auburn, and Bankstown, also reported an increase in vacancy rates. This was driven by new apartment developments, which have led to a market surplus.  Data showed that landlords are finding it difficult to adjust by reducing rent.

Campsie, Gladesville and Artarmon, meanwhile, showed a decrease in their vacancy rates, according to real estate agencies in Sydney’s inner ring.

The Hunter region also bucked the trend, recording fairly steady vacancy rates over the period. Newcastle rose by 0.6% to 2.5%.

“Agent feedback in Newcastle suggests that it is getting harder to find tenants, with a slower market and a surplus of properties up for lease,” said REINSW President Leanne Pilkington.

Looking into Illawarra region, REINSW found a substantial jump in Wollongong’s rental vacancies— up from 2.7% to 2.9%.

“Agents have let us know there are a lot of new developments in the area – mainly for student housing – boosting Wollongong’s vacancy rate,” Leanne says. “Demand for student housing has also led to established residents in the area renting out their granny flats and rooms, which is also a contributing factor,” Pilkington said.

The report revealed that the rest of NSW logged slight increases in five key areas: the Central Coast (2.3%), Mid-North Coast (2.1%), Murrumbidgee (1.0%), New England (2.1%) and Riverina (3.1%).

The Central West (2.2% vacancy rate), Coffs Harbour (1.2%) and the South Eastern regions (1.3%) showed signs of life, recording the largest vacancy-rate decreases of between 0.5% and 0.7%.