HIA (Housing Industry of Aust) recently claimed (Oct 2005) that the current rental supply is not meeting demand and that Sydney may well be heading for a rental crisis, running out of vacant rental stock within the next 18 mths. They blame Sydney councils’ slow approval processes for new apartments. An estimated 4200 flats, units and apartments are stuck in the offices of Sydney councils awaiting approval, with allegations that some have been on council desks for more than two years. HIA’s NSW Executive Director Wayne Gersbach said that with Sydney rents already increasing faster than inflation, urgent action must be taken to get apartment and medium density projects into the construction pipeline rather than being locked up at the approval stage. “While the merry-go-round of arguments relating to planning, zoning, and sustainability continue, the unstoppable force of housing demand will further drive up rents and squeeze modest and low income earners,” he said. “Sydney’s supply of rental dwellings increased by only 14,500 in 2004/05, down 13% on the previous year and sending the rental vacancy rate plunging from 3.6 to 2.5%. With rental investment lending in NSW still down some 40% on two years ago, and with 14 consecutive months of sub-2000 new unit approvals, it is hard to see us adding more than 10,000 new properties to the rental stock over the next year. At this rate, the Sydney rental vacancy rate will plunge to zero by Christmas next year.” Naturally, one can assume that such a looming crisis will not affect all of Sydney, and certainly not those suburbs who are still experiencing continual growth through new housing estates. However, it's interesting to read what HIA thinks and we will have to now wait until Dec 2006 to see if their forecasts ring true.