NSW tenancy agreements signed fell by more than 25,000 in a year and bonds held are shrinking. The peak body's data undercuts the reform case.
The Property Desk is a contributing writer covering property and public affairs for The Sydney Times.
The NSW rental market is contracting rather than tightening, according to the Real Estate Institute of New South Wales. Residential tenancy agreements signed across the state fell from 271,618 in the 2024-25 financial year to 245,249 in 2025-26, a decline of more than 25,000 agreements in twelve months, with roughly 800 fewer agreements between May and June 2026 alone.
That is the opposite of what a housing shortage looks like. It is also a direct challenge to the argument the NSW Government has been making since the first tranche of tenancy law reform, and the data comes from the government's own bond lodgement records.
REINSW chief executive Tim McKibbin does not put it delicately. In the institute's "Rental Reversal" release of 20 July 2026 he wrote that "when demand among renters is as strong as it currently is, a natural market response would be the increased absorption of rental supply," then concluded that "legislative changes have distorted the market's ability to respond. What we're left with is a spiralling societal disaster."
Mr McKibbin argued that the reforms meant renters unable to afford one area or property type are pushed to another suburb or a smaller dwelling rather than clearing the market, and that "consistently rising rents are making it harder than ever for tenants to save a deposit." He also noted that among renters who no longer rent, only a small share move into first home ownership.
The tension between the institute and the state is personal as well as analytical. On 17 July 2026 REINSW wrote to Premier Chris Minns requesting the removal of Anoulack Chanthivong, Minister for Better Regulation and Fair Trading, from the portfolio. The minister's department administers the reforms the institute says have backfired.
NSW Fair Trading's own published schedule sets out when each change took effect:
Most of the shift in the agreement numbers therefore predates the tenancy data collection that started on 1 July 2026. That is why the REINSW figures cannot be attributed to any single reform, and why the institute is pointing at the cumulative effect of the package rather than one clause.
Fair Trading's June 2026 Rental Bonds Data Insights Pack, as cited by REINSW, recorded the number of bonds held declining over the quarter, with a significant drop from May to June. Average rental tenure fell 0.9 per cent year on year.
Falling bonds held means fewer tenancies in the system. It is a different signal from a rising vacancy rate, which describes stock standing empty. Both can be true of a market where supply is being withdrawn faster than it is being filled.
The two government datasets are published. NSW Fair Trading releases rental bond lodgement data monthly, currently through August 2026, with quarterly refund data through the second quarter of 2026 and annual bond holdings as at December 2025. All of it is downloadable.
The commercial data is split, and the split matters. Domain's June quarter 2026 report recorded Sydney house rents rising $50, or 6.3 per cent, to a record $850 a week, the largest quarterly increase of any capital city, alongside unit rents up $30 to $780. Across the combined capitals, house rents rose 7.7 per cent year on year.
Cotality, by contrast, had Sydney gross yields rising to 3.3 per cent from 3.0 per cent a year earlier, with house rents up 6.6 per cent year on year and units up 4.7 per cent. Owner-occupier and investor sentiment is moving the other way: NAB's September Housing Monitor put Sydney dwelling prices down 1.4 per cent on the month and 7.1 per cent below peak, with median days on market at 38, the highest since October 2022, and investor lending down 10.2 per cent quarter on quarter in the second quarter.
Rents at records, prices below peak, investor credit contracting. That combination is what a market absorbing a legal change to exit costs looks like in flight, and it will not resolve until the 1 July 2026 end-of-tenancy data starts landing.
Fair Trading only began recording who ended a tenancy and on what grounds on 1 July 2026. Combined with the mandatory 14-day end-of-tenancy survey in Rental Bonds Online, which requires a landlord to give a reason, this is the first moment NSW will hold hard evidence on eviction causes. Nothing has been published yet.
There is also no official vacancy rate. NSW has no government vacancy series at all. The available figures come from REINSW, whose monthly vacancy releases are members-only, from SQM Research as a commercial subscription service, and from Domain, which publishes asking rents rather than vacancy. The NSW Government does not publish a vacancy rate alongside its own bond data, which is the single most useful missing number for anyone assessing whether the reforms are working.
Suburb-level medians require computation from the raw bond lodgement files by postcode, which the Tenants' Union of NSW Rent Tracker does. Tenant advocates point to the domestic violence reforms commencing on 21 September 2026 as materially different in kind: victim-survivor tenants are no longer liable for property damage caused by abuse where the Tribunal finds that link, tenants may withhold consent to advertising photography and video, and listing a victim-survivor on a tenancy database is banned. Three days is not long enough to know whether the Tribunal has adopted them. Primary data is published by NSW Fair Trading and our Property desk tracks the reform programme.
Direct inquiries, corrections, or documentation concerning this dispatch to our editorial newsroom desk.
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