Published: 23 February 2008.

By Jano Gibson for the Sydney Morning Herald

New renters have been locked out of some of Sydney's most sought-after suburbs as real estate agents report that they have no properties for lease.

It is not uncommon to see 60 people competing for properties in the city, inner west, eastern suburbs and the lower North Shore. Occasionally that figure surpasses 100. A Bellevue Hill apartment listed on a property website recently attracted 4655 hits in 10 days.

There are so few places available that applications are being thrust into agents' hands even when people are dissatisfied with the property on offer. Bidding wars are bumping up asking prices, and keen home hunters are giving three to six months' rent in advance.

"It's like war. It's full on," said Bridget Lyon, whose family has been forced to look for their third home in two years after their second landlord in a row evicted them to undertake renovations.

The president of the Real Estate Institute of NSW, Steve Martin, said the vacancy rate in Sydney last month was 1.2 per cent, the lowest January figure in at least five years.

"People ... are looking at the competition they've got and they are filling out application forms and offering in excess of what the asking rental is just to secure rental accommodation," Mr Martin said.

Gabi Somlai, of Elders Neutral Bay, said his agency managed 400 rental properties but none was available this week. The lack of properties is putting the squeeze on potential tenants, literally, as agents separate people into groups so they can fit into small inner-city apartments. Viewing times are being extended to cope with the demand.

"It's a little bit like crowd control," said the state manager of RUN Property, Michael Conolly.

Median rental prices in Sydney have shot up $40 over the past year, according to a Housing NSW report published last week. Auburn and Marrickville had the steepest annual climbs, with each jumping 25 per cent for two-bedroom flats. New bonds lodged fell 6.3 per cent.

"People are so aware that if they vacate and give up their premises ... the chances of finding alternative accommodation [are] very remote," Mr Martin said.

When the Herald visited an inspection of a $280-a-week one-bedroom unit in Dolphin Street, Coogee, on Wednesday almost 30 people were there. Byron Shaw said he had looked at nearly 40 properties in the past six weeks.

"I've applied for 11 and I've got a pretty good job, so I'd be earning above average. And I just can't get a place."

Matt Garrett said the rental situation was at crisis point.

"When I first rented in the eastern suburbs four or five years ago I just went to an agent and they gave me a couple of keys to look at three or four different apartments and I picked one. Now I'm fighting 30 or 40 people. There is no easy way in."

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