The already taunt rental market of New South Wales shows signs of further deterioration rather than improving according to The Real Estate Institute of New South Wales. The University City is facing the consequence of rental property shortage. The vacancy rate here dipped to below one percent. Tim McKibbin, chief executive officer of the Real Estate Institute of New South Wales feels that there is immense pressure on the rental market. This will result in high mortgage defaulters which will only add to the pressure. The city is very popular with the younger generation as it is very close to the tertiary institutions and the city is linked with a good public transport system. The demand for housing facility is not just from the young students but also from many migrant people who come into town looking for work. There is an acute short supply of houses in the area. The high interest rate is deterring people from investing in housing or even trying to construct one. This has les to a shortage of residential property in New castle. There seem to be no hope for the housing market to be improving in the near future.

The supply of houses is much less than the demand this has led to a spiral rise in the rents which is beyond the affordability of the students. One cannot find anything below two hundred fifty dollars. The scene on the rental front is really in disarray. The agents feel that they had never come across such a worse situation in housing industry. The rising interest rate has made the home buyers tread with caution. Wayne Stuart, the Vice President of the Real Estate Institute of New South Wales says that it is high time the government starts tasking action. They must give more incentives to the investor. This might improve the situation a little better as people might consider investing in the housing industry. The government has to ease the land tax, the high levels of stamp duty, and capital gains tax. This will marginally ease the pressure on the investor.

The real estate agents are complaining that only third of the houses on sale have been sold. The scene is much bad than the year before. The number of residential property on sale has gone up as no wants to touch them now. There are a number of people moving into the city but there are not enough homes for them. Thus the situation leads to a major rise in rental prices. Thus the rental market has become very strained. The predicted number of housing need is almost eighteen thousand. These number of houses will somewhat ease the pressure till the coming year.