Rental vacancies in Sydney have increased for the first time in three months but tenants in Newcastle haven’t been so lucky.

Vacancies for the Sydney metropolitan area jumped by 0.2 percentage points in December to 1.6 per cent, Real Estate Institute of NSW figures show.

This marked the first rise since August following several flat months.

Middle-distant suburbs, 10km to 25km from the city centre had Sydney’s highest rental vacancy rate of 2 per cent – a jump of 0.3 percentage points.

Choice for renters was tighter in the inner city with just 1.5 per cent of properties available but this marked a rise of 0.3 percentage points.

By comparison, rental competition was slightly fiercer in the outer suburbs with 1.4 per cent of residential properties available, a 0.1 percentage point increase.

The story was bleaker for renters in Newcastle, with vacancy rates falling by 0.5 percentage points to 1.1 per cent, making it the state’s tightest rental market.

In Wollongong, vacancies fell by 0.1 percentage points to 2.2 per cent.

Coffs Harbour had the state’s highest rental vacancy rate of 3.6 per cent.

Institute president Christian Payne said rental vacancies were likely to become tighter in early 2012.

“The already low levels of available rental properties are likely to be squeezed even further as people return to work and schools and universities resume for the academic year,” he said.