Some units in the Atmosphere Tower in Castle Hill have been advertised with two weeks free rent. Picture: AAP/Mark Scott

Ghost towers packed with empty apartments are springing up across Sydney as developers continue to release new high-rise homes into a saturated unit market.

A record 3.4 per cent of Sydney rentals were sitting empty in April — the highest since records began in 2005 — and experts said the building rush could push vacancies as high as 4 per cent by the end of the year.

This will give tenants the upper hand in rent negotiations after years of being at the mercy of landlords, who just two years ago could easily hike prices because only 1.7 per cent of Sydney rentals were available.

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In Castle Hill, landlords in the 21-storey building near the new train station are advertising properties with two weeks free rent as they compete for tenants.

Shelly Bray and John Jackson said it took a long time for their unit block on Caddies Boulevard, Rouse Hill to fill. Picture: Adam Yip

The vacancies follow developers rolling out high-rise apartments in suburbs traditionally dominated by single-level houses, such as the Hills District, Penrith and upper north shore.

Property analysts said new unit buildings in the Hills District, many released just before the opening of the Sydney Metro Northwest rail link, were often out of synch with local tastes as the region traditionally drew families seeking space.

There are currently 5.6 per cent of Hills rentals vacant and close to eight per cent of rentals in the Rouse Hill-Kellyville postcode are untenanted, according to SQM Research.

My Housing Market analyst Andrew Wilson said it would take some time for the local tenant base in the Hills region to warm to new apartments.

“There’s isn’t the same underlying rental demand for units in the Hills as there is in the inner city,” Mr Wilson said.

Rouse Hill apartment residents John Jackson, 41, and partner Shelley Bray, 29, said their block on Caddies Blvd was far from full when they moved in last year.

“It did take a long time for it to fill up,” Ms Bray said.

Mr Jackson said it was obvious the area was oversupplied with apartments. “There are plenty coming up all over the place, around Kellyville, around here. Every time you drive around you spot the new buildings coming up,” he said.

Many of the apartments in this Kellyville Ridge block have yet to be tenanted.

SQM Research director Louis Christopher said the Sydney-wide vacancy rate could rise to 4 per cent by year-end because projects started two to three years during the height of the market boom still needed to be completed.

“These projects were based on decisions developers made years ago so they can’t stop releasing them,” Mr Christopher said.

He added that some developers should have done more research on the feasibility of their projects in further flung suburbs.

“They need to give the market what it wants,” Mr Christopher said. “Big developers have the mechanism to do this, but many smaller developers don’t have access to the same research.”