Released by REA Group, publisher of realestate.com.au, the Measures to Alleviate the Crisis in the Rental Market report brings together NSW tenant representatives, property owners and managers, developers and policy makers to unite industry-supported solutions.

To address the rental housing crisis, the report recommends continuing to encourage investment to keep property investors in the market, prioritising improvements in housing access and supply, and improving government planning processes to facilitate rapid and efficient development.

PropTrack Senior Economist and author of the report, Paul Ryan, said targeted and well-considered policy reforms had the potential to unlock housing supply in NSW and nationally.

Mr Ryan said the NSW rental market remained highly competitive, with many more potential renters per rental listing than before the pandemic.

According to PropTrack, the number of active renters looking for accommodation and the number of applications per rental listing remain high in NSW.

In Sydney, the rental vacancy rate is 1.65 per cent, less than half the pre-pandemic level.

These extreme market conditions continue to put pressure on advertised rents, which have risen by 14.5 per cent in Sydney over the past year.

Against a backdrop of rising prices, rising rents are putting enormous pressure on renting households, and the current situation will exacerbate their financial stress," Mr Ryan said.

Adding to the problem, the pace of construction has slowed across the country, with 72,000 fewer homes being built since the pandemic broke out than were built before the pandemic broke out.

At the same time, development conditions remain constrained by rising costs of financing, materials and labour.

Public housing has not increased since the onset of the pandemic, despite a major boost to housing construction in the past.

In addition, planned development in Sydney is concentrated in a few areas in the west and south-west of the city, away from existing residents and services.

While there is no quick fix to the rental crisis in NSW, there are a range of policy reforms that will help boost the state's sagging rental market.

For investors, there are incentives to increase consumer protection for new homes.

The report also notes the importance of existing investor incentives to keep investors in the market and urges policymakers to refrain from increasing rent regulation, such as rent freezes.

Mr Ryan said: 'The good news is that we are starting to see investors return, which is an important support for housing supply and shows long-term confidence in the market.

Alongside these reforms, we can improve tenure security for renters and the suitability of homes by focusing on energy efficiency and higher minimum standards.

To help improve the utilisation of existing properties and land, the report recommends higher taxes on vacant homes and replacing stamp duty with a land tax.

The report recommends the development of a co-ordinated planning process between local and state governments to facilitate fast and efficient development and greater support for social and affordable housing.

Ways to support renters include promoting long-term leases, providing more rent-to-own options and improving strata management.

Tenants will also benefit from improved property management services and higher minimum energy efficiency standards for new homes.

The report draws inspiration from an industry forum convened by REA Group with representatives from the NSW Tenants' Union, NSW Property Association, NSW Government, LJ Hooker, Ray White, Stockland, Salta Properties and Urban Development Australia NSW.

REA Group Chief Customer Officer Kul Singh, who worked with Mr Ryan on the project, said the report and industry forum was a response to calls to unite the industry to help inform policy and influence meaningful change.

We want to bring together different perspectives, look to the immediate future and address what we can do now to ensure better housing outcomes for all Australians, Mr Singh said.

We need to find more efficient and effective ways to increase supply, encourage investment, and attract and retain property managers to safeguard the rental experience.

We are pleased to see that some of these areas are on the national agenda for regulators and policymakers, and the recent announcement by the National Cabinet to increase housing supply is a welcome step forward.

Earlier this month, the National Cabinet boosted its house-building ambitions by setting an escalating target of 1.2 million new homes to be built over five years, with plans to strengthen the rights of renters.