I’ve been back in Sydney for three weeks now and have been looking for an apartment all that time. Since we left 15 months ago, the rental scene has gone crazy, mainly due to ever-increasing interest rates. The Reserve Bank raised the cash rate to 7.25% last week and, since the credit crunch increases the spread between the cash rate and the rate at which the banks can actually borrow from each other, most banks plan to “add their own extra increase”:http://www.theaustralian.news.com.au/story/0,25197,23335011-36418,00.html on top, meaning a variable rate mortgage will cost at least 9%.

Most first-time buyers are wary of entering the market in these conditions and are looking to rent instead, increasing competition for an already scarce resource. Sydney is “full”, with 99% occupancy of rental properties, so there have been times in the last two weeks when we’ve gone to view a place and had up to 70 other people show up as well! On the plus side, I did make it on to national TV when a news crew showed up at a place we were viewing to do a piece on how bad the rental market is, and I could be seen walking in to the apartment in the background. Fleeting glimpses of fame…

Anyway, we have applications in for two places, so hopefully one will come through with the goods.