Melbourne tenants are again having to battle it out for a roof over their heads, as competition in the city’s rental market heats up.
Grant King has been struggling to secure a rental with his girlfriend this year. Picture: Tony Gough
Melbourne tenants are again having to battle it out for a roof over their heads, as competition in the city’s rental market heats up.
Pre-pandemic norms of swarms of hopefuls and property managers rushing between appointments are characterising city inspections once more, with returning international students, migration from other states, and people moving back out of family homes driving frenetic conditions.
Barry Plant executive director Mike McCarthy said the vacancy rate in the inner city – the region hardest hit by the Covid exodus – was about half what it was six months ago.
No. 56 Elm St, North Melbourne, is listed for $500 a week.
Vacancy rates in parts of the inner city peaked at 18 per cent in 2020, according to SQM Research.
But listings were now down “80-odd per cent” around the CBD, Southbank and Docklands compared to “at the peak of the downturn”, Mr McCarthy said.
At the height of the pandemic, renters could often negotiate cheaper rents, particularly in inner Melbourne, as apartments languished empty on the market for months.
But rents in the inner city SA3 region have jumped 12.4 per cent in the past year, according to CoreLogic, with growth particularly strong in the past few months.
CoreLogic head of research Tim Lawless noted rents in Docklands and Melbourne CBD were up 6.6 per cent in the past three months, and Southbank 6.2 per cent.
No. 3005/11 Rose Lane, Melbourne, is priced at $460 a week.
No. 1018/628 Flinders St, Docklands, is $450 a week.
Their affordability after a Covid whack is now a driving factor in their appeal, with higher density living back on the agenda amid strong vaccination rates.
“You’d have to say these trends would continue, if not gather some pace,” Mr Lawless said.
“We’re still seeing rental rates substantially lower than what they were pre-Covid across the inner city SA3 region. They’re still 13.2 per cent lower than before Covid – that’s about $126 a week cheaper than what they used to be.”
Overall, Melbourne’s rental market is expected to continue to become more balanced this year, as is the sales market.
Mr McCarthy said since borders opened up, there had been a real “surge” in the rental market. Fewer people keen on housesharing was another noteworthy factor as conditions shifted.
Melbourne renter Grant King has struggled to find a place with his girlfriend since the beginning of the year, with the end of his Brunswick East tenancy looming.
Property managers have been flat out — and it’s hard to get a call back.
Melbourne vacancy rates are tightening again as people return to the city. Picture: NCA NewsWire / David Crosling
“We’ve found it difficult to make a lot of inspection times because we have work,” he said.
“One agent told us people are often applying without having seen the place in person, and I’m calling a lot of property managers and never hearing back.”
Propertyology head of research Simon Pressley said Melbourne still ended the year with the highest rental vacancy rate of “every capital city and regional location across Australia”.
He said the 20,368 dwellings advertised across greater Melbourne at the end of December 2021 was “83 per cent more than March 2020, when the germ changed everyone’s lives”.
“But the situation is improving,” he said.
Propertyology figures show a “very tight” greater Melbourne vacancy rate of 2.2 per cent in December 2018 became 4.7 per cent at its peak “due to the large scale exodus away from Melbourne”, noting the current 3.2 per cent vacancy as “an encouraging sign”.HOW TO NAB A RENTAL
– Do your homework. Check that the area is suitable, drive past the home and inspect from the outside. Then contact the agent and let them know it’s exactly what you are looking for and request an inspection as soon as possible. Even if it’s advertised as open on Saturday you might get a private inspection if you show that you are a genuine renter ready to sign up.
– Have your documentation ready. Written references, photos of your pets, written references for you and your pets. Provide as much information as you can to show that you would be a suitable renter. Just like a resume, you want your application to stand out.
– Apply for the property immediately after you have inspected it. Don’t wait until tomorrow when you have more time, as tomorrow might be too late.
– Find out the agent’s name and send them an email or text message letting them know you have submitted your application and are happy to answer any additional questions they might have. Let them know you love the property and would love to be the new renter.
– Owners are typically looking for someone to move in as soon as possible. Being unavailable to commence a lease agreement for three or four weeks can be a big disadvantage. Your application may be overlooked on this point alone with the owner choosing someone that can move in next week. You may have to pay rent on your current home and the new rental for a week or two but it could be the decision that helps you to secure your next property.
Inner Melbourne unit rents summary of change to January 2022
SA2 Region, 3 month change in rents, 12 month change in rents, Change since March 2020
Kensington (Melbourne City), 4.0%, 12.7%, -3.0%
Carlton (Melbourne City), 4.6%, 8.6%, -14.7%
Parkville (Melbourne City), 4.6%, 12.4%, -5.1%
East Melbourne (Melbourne City), 5.2%, 14.0%, -7.7%
South Yarra – West (Melbourne City), 5.5%, 13.2%, -7.4%
North Melbourne (Melbourne City), 5.7%, 12.0%, -8.9%
Southbank (Melbourne City), 6.2%, 14.7%, -13.2%
Docklands (Melbourne City), 6.6%, 15.1%, -11.0%
Melbourne (Melbourne City), 6.6%, 11.0%, -17.3%
Melbourne Inner City SA3, 6.0%, 12.4%, -13.2%
Greater Melbourne, 2.4%, 4.4%, -4.2%
VACANCY RATES, as at end of December
Greater-Melbourne
3.2%
Melbourne-City
4.2%
Eastern Melbourne
1.8%
South-East Melbourne
1.3%
Inner-East Melbourne
4.4%
Eastern Melbourne
1.8%
Western Melbourne
3.9%
South-West Melbourne
3.6%
North-West Melbourne
2.7%
Northern Melbourne
2.9%
Mornington Peninsula
0.6%
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Originally published as Melbourne rental market: Renters’ fresh struggle as conditions shift
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