Rents have started to decrease or stabilize across nearly two-thirds of Sydney, following a series of landlord reforms. Experts are viewing these changes as a positive indicator that the worst of the rental crisis may be behind us.

Despite this, Australia’s severe rental shortage is expected to persist in the near future, according to recent research. The national rental vacancy rate stands at just 1.3%, with 35,425 rental properties currently unoccupied, as reported by SQM Research.

For periodic tenancies, landlords can only increase rent once every 12 months, and must provide at least 60 days’ notice before implementing any changes. However, it’s worth noting that there is no specific cap on rent increases for periodic leases.

One key factor driving the rental crisis is the growing population in major Australian cities.

As more people migrate to urban areas, housing demand has surged, pushing rental prices higher.

In the first quarter of 2024, rental growth accelerated again, with Sydney house rents reaching a new record median of $750 per week. This represents a 2.7% increase compared to the previous quarter, nearly double the pace of the previous quarter and the same period in 2023.

Over the past six years, median rents have risen sharply across all bedroom categories.

In the West Central Sydney region, some of the biggest increases were seen in one-bedroom properties in Blacktown (50%) and four-bedroom properties in Bankstown (50%).

The typical rent for a Sydney property grew 8.8% in the year leading up to July, a slowdown compared to the almost 14% rise seen during 2022/23, according to PropTrack. Economist Anne Flaherty from PropTrack noted that while these changes may seem small, they represent the first positive shift for renters in some time.

Several factors have contributed to the rental crisis in Sydney, including high immigration, limited new housing supply, rising construction costs, regulatory challenges, and a complex planning system.