NSW rental crisis could get worse: institute

There is a warning that the record number of people defaulting on their mortgages will add to the New South Wales' rental crisis.

The latest July figures from The Real Estate Institute of New South Wales show rental vacancies improved by just 0.1 per cent in Sydney to 1.2 per cent.

The institute's chief executive, Tim McKibbin, says the rental market is under immense pressure and record high mortgage defaults will only inflame the situation.

"Mortgage defaulters [are] coming into the market and seeking accommodation in a market that's already depressed," he said.

"That is going to add additional stress to the market and very very unfortunately I guess additional stress to the mortgage defaulters, who have already had a considerable amount of upheaval in their lives already."

Mr McKibbin says the New South Wales Government is not doing enough to encourage new investment.

"What we've been telling the Government to do for months now is to look at stamp duty and land tax as being the two disincentives to investment in this area," he said.

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