Sydney's rental market has shifted into a seller's market, with a relatively limited number of available homes while tenant demand continues to grow.

According to statistics from Australia's largest real estate data company, PropTrack, only 1.18% of rental properties are currently on the market, a two-thirds decrease compared to early 2020. This means that tenants face fiercer competition when searching for suitable housing, driving up rental prices.

At the same time, the rental market's supply shortage has led to a rapid increase in rental rates.

It is expected that in the coming months, rents will continue to rise at an above-average pace, putting greater economic pressure on tenants. Rental shortages are also evident in other major cities like Brisbane, Adelaide, and Perth, where rental vacancy rates are even lower than 1%.

Several factors contribute to this supply-demand imbalance. Firstly, Sydney has experienced rapid population growth, especially in the recovery of overseas immigration numbers. The latest data indicates an overseas immigration population exceeding 454,000, nearly double the approximately 220,000 before the pandemic. This population increase has added significant demand pressure to the rental market.

Housing construction lag is also a significant factor. In recent years, housing construction in Sydney has lagged behind market demand, leading to a supply shortage. While the government has taken a series of measures to stimulate housing construction, newly constructed homes still cannot meet the rapidly growing demand.

Additionally, the softness in the housing investor market has had some impact on supply. Due to factors such as taxation and lending restrictions, some investors have exited the market or shifted their investments to other sectors, further reducing the number of homes available for rent.

In response to this situation, government and relevant authorities need to take proactive measures to address the supply-demand imbalance in the rental market. Accelerating housing construction, providing more rental housing, and improving the investment environment are potential actions that could help balance the market, giving tenants more choices and alleviating rental price pressures.