TENANTS are facing the toughest rental market in history across the Hunter as property vacancy rates drop to record lows.
Queues of 50 people looking at one rental property and frantic applicants offering up to $50 extra per week to secure a home have become reality across the region.
By the time the real estate agent arrives for the 15-minute viewing there's an expectant line of people waiting outside the advertised property.
Real Estate Institute NSW Newcastle Hunter divisional chairman Wayne Stewart said the mood was more funeral than festive as an increasing number of people compete for a dwindling number of rental properties.
With the region's inflated property prices continuing to slide, demand for houses and apartments to rent is spiralling out of control, amid a NSW housing shortage of 250,000 properties.
Mr Stewart, the managing director of Century 21 Novocastrian that manages 2500 rental properties, said competition was 'fierce' and people were "desperate".
He said the Hunter's property vacancy rate had dropped below 1 per cent and a balanced market was considered to be between 3 per cent and 4 per cent.
"People are thinking if they pay more the landlord will take them," he said.
"It is ultimately the landlord who decides, but we are definitely seeing some very silly rents at the moment."
Mr Stewart said a one-bedroom unit in Sydney's harbourside suburb of Mosman was priced around the same as a one-bedroom unit in Honeysuckle.
He said in the space of about 18 months the price had jumped from around $400 per week to up to $550.
"We used to have the tenant move out and there would be a turnaround period," he said. "Now we have a situation where the new tenant moves in the day after the old tenant moves out. The demand is that high."
Real Estate Institute NSW chief executive Tim McKibbin said it was about time the NSW government took ownership of the rental crisis and provided solutions.
"It's time for government to be accountable. Only through incentivising investment in this sector of the economy can supply be addressed and begin to meet demand," he said.
"Agents cannot conjure up more properties for people to rent."
CoreLogic research analyst Kaytlin Ezzy said there had been a decline in investors purchasing property between 2017 and early 2020.
"Through this period, a mix of temporary changes to mortgage lending conditions, and the uncertainty surrounding the onset of COVID-19 limited residential property purchases," she said.
"Additionally, CoreLogic recorded an increase in investor-owned housing stock being listed for sale through 2021 and into 2022, with many investors possibly looking to maximise capital gains through the upswing."
Conditions for renters applying for Hunter properties are expected to worsen as the 2023 school year begins and international migrants and students return in bigger numbers following the easing of pandemic restrictions.
"When 40 people apply for a rental property, irrespective of what rent is paid, 39 people still have nowhere to live," Mr McKibbin said.
"When a tenant offers an extra $20 a week in rent, it sounds good to a landlord whose repayments have gone up $1000 a month."
Mr McKibbin said the crisis would worsen unless the government acts.
"Numbers don't lie," he said.
"Over the last 12 months, the NSW population has grown by over 100,000 people while the number of rental properties has declined by 50,000."
