The availability of rental properties across regional New South Wales has dropped to new lows, as city dwellers realise the benefits of working remotely.
Most regional areas reported a vacancy rate of less than 1 per cent in September, according to a survey by the Real Estate Institute of NSW.
The largest fall in rental vacancies has been on the Central Coast, where rental vacancies were at 4.3 per cent in January and are now at 0.7 per cent.
The findings coincide with the Sydney vacancy rate rising to 4.1 per cent.
REINSW chief executive Tim McKibbin said interest in regions more than 200 kilometres outside of Sydney had been surprising, but he believes it has been driven by the COVID-19 pandemic.
"I think what is driving it is the realisation that people can work effectively from home," Mr McKibbin said.
"Once you come to that realisation and then you look at the cost of property in Sydney and you look at the cost of property in our regional areas, then it becomes very attractive to move out there."
The survey found only the New England, Illawarra and Hunter regions of NSW registered a vacancy rate greater than 1 per cent.
Will regional rental prices soar?
But Mr McKibbin warned the tightening rental market outside of Sydney would drive up prices.
He said one solution to keep prices down would be to build more homes.
"I think that poses a real question for the local construction industry as to whether or not they are able to respond, and for that matter town planners and developers who will need to come together very quickly."
In Coffs Harbour, on the state's mid-north coast, real estate agency director Mark Webb said he was already seeing rental prices rise after the rental vacancy rate went from a high of 4.5 per cent in February to 0.9 per cent in September.
"We can see 20 to 30 people attending open houses with 10 to 15 applications coming in straight away," he said.
Mr Webb said last week his business had around six properties available for rent, which is unheard of for an agency of its size.
Some of the demand for rental properties in Coffs Harbour is coming from Sydneysiders, but Mr Webb said there have been requests from further away as well.
"Even though the borders are closed, we are still getting a lot of email inquiries and people looking for a bit more of a lifestyle change," he said.
The tight rental market in Coffs Harbour comes ahead of an expected influx of workers when the Pacific Highway Bypass project begins by the end of 2020.
Mr Webb said the added pressure will make it very difficult for anyone in the city to find accommodation.
"We are in uncharted territory — it's the busiest that I've seen in it in 24 years in my time in real estate," Mr Webb said.
