Rental Market Sets Standard For State

Newcastle Herald

Monday December 16, 2002

By SALLY CROXTON and JUSTIN NORRIE

THE Hunter and Newcastle rental market is performing better than any metropolitan area in NSW with vacancy rates dropping again in November.

The Real Estate Institute of NSW (REINSW) has just issued its residential property management survey results for November that show Newcastle's vacancy rate at 1.4%, down from 2.4% in October and less than half the 2.9% vacancy rate of November last year.

The Hunter Region experienced a slight decline in its already low vacancy rate which stood at 2% in October and dropped to 1.8% in November (it was 1.5% in November last year).

Sydney's inner city rental market is also looking healthier for investors with the vacancy rate falling to 3.1% in November after peaking at 5.1% in June.

Over the whole city the vacancy rate stood at 4.1% in November, the lowest rate for seven months.

Young renters Ray Miller and Belinda Tooth were forced to take a home that was bigger than they needed when they moved to Newcastle two weeks ago.

The couple said their three-bedroom, $240-a-week East Mayfield house was the first `decent option' they inspected.

`We could have had less bedrooms, but this was the first decent option we came across,' Ms Tooth, 21, said.

`Obviously you can still get places for rent in Newcastle, but I think if you want something good you have to pay a bit more.'

REINSW president Chris Fitzpatrick said the vacancy rate had been declining steadily over the past few months, particularly in inner Sydney.

He said vacancies in regional NSW were quite low with only two areas recording rates above 2.7%.

The figures were good news for property investors throughout the State, he said.

Guy Robinson, of Newcastle's Robinson Property, said that usually the rental market was quieter leading up to Christmas, but not this year.

`This is the tightest I have seen the rental market for some time and with only limited new stock coming on line I can't see it slowing down in the near future,' Mr Robinson said.

The `very tight' rental market had pushed up rental prices, official figures showed.

While rentals for houses in Sydney fell by up to 3.8% for the year to the end of September, Newcastle house rentals rose by up to 6.9%.

Apartments also did well with rentals increasing by up to 6.7% compared with a drop of up to 1.8% for rentals for Sydney apartments to the end of September.

`The Reserve Bank Governor and property market economists have used the high vacancy rates and falling rentals in the Sydney, Melbourne and Brisbane markets to warn property investors away from the housing and apartment markets,' he said.