Rental market freezes as rents rise

Media Release, 7 May 2008

Tenants in established tenancies are staying put while those looking for housing face extraordinarily high rents, according to figures released today by the NSW State Government.

The Rent and Sales Report, compiled by Housing NSW from data from the NSW Rental Bond Board, shows the median rent for tenancies commencing in the quarter to March 2008 increased 11 per cent relative to tenancies commencing the same quarter last year. The median rent for Sydney tenancies commencing in the March quarter was up 9.4 per cent relative to a year ago.  

The Report also indicates that the number of new tenancies commencing, as measured by the number of new bonds lodged, is down 7.4 per relative to the March quarter last year, and down 14.4 per cent from the March quarter five years ago.

'The March quarter is usually the strongest for new tenancies commencing, because of the start of the academic year. This is lowest March quarter - and the third lowest quarter - for five years,' said Chris Martin, Policy Officer for the Tenants' Union of NSW. 'Tenants have stopped moving. They're trying to weather the housing crisis by staying in their current tenancies, while those outside face punishing rents.'

The Tenants' Union reminded that the rent figures in the Rent and Sales Report relate to new tenancies recently commenced, not all tenancies. 'Rents for all tenancies are rising, but not as strongly as rents for new tenancies. Last month's CPI figures showed that Sydney rents rose 6 per cent over the past year - that's a significant increase, but less than the 9.4 per cent for new tenancies. That difference is the reason why tenants are staying put', said Mr Martin.

The Tenants' Union called on the NSW State Government to do its part in increasing the supply of affordable rental housing. 'We're still waiting for its Interim Affordable Housing Strategy - it was due to be released mid-2006. And now its proposed changes to planning laws will restrict the ability of planning authorities to make provision for affordable housing in their plans.'