According to the latest data released by PropTrack on Tuesday, the total number of properties listed for rent plummeted by around 22% last year, hitting a historic low. Meanwhile, rapid population growth continues to fuel stronger demand, resulting in a shortage of rental properties.

In this scenario, Sydney tenants are facing the dilemma of an average 16.7% weekly rent increase. The median rent for all residential properties in the city has reached $700 per week.

Moreover, the supply of new rental properties has also sharply declined. In December, the number of new rental listings on the realestate.com.au website decreased by 4.6% compared to a year ago and by 14.5% compared to the ten-year average. This situation has left tenants feeling increasingly anxious as they struggle to find suitable housing or afford rent.

Experts point out that the situation has arisen due to insufficient supply and urgent demand. Sydney's rapid population growth, coupled with a large number of net overseas immigrants, has brought more people into the rental market. Meanwhile, many investors have cashed out their properties during and after the pandemic, further reducing rental supply. Despite some rebound in investment activity, it is still insufficient to improve the conditions for tenants.

Although the federal government has set a target of building 1.2 million new homes over the next five fiscal years, there is a lack of specific plans to achieve this goal. Data from New South Wales shows that only 8,906 new homes were started, the lowest number since June 2012, and an increasing number of new homes are being built for owner-occupiers.

Rising construction costs and labor shortages have also constrained the construction of new properties, making it more difficult for people to purchase as planned, which hampers the initiation of new apartment projects. Despite rising repayment costs, the increase in rents is prompting more tenants to become first-time homebuyers. Shared housing may become more attractive for those unable to afford homeownership.

With no significant increase in supply, more and more people will be unable to afford rent, and more will opt for shared housing. This situation requires effective measures from the government and relevant agencies to increase housing supply and address the problems caused by the rental crisis in Sydney. Otherwise, the issue may worsen, leading to greater life pressures for Sydney residents.