Melbourne rent crisis: Tenants paying $65 more per week compared to a year ago | PropTrack
Sarah Petty, Property Journalist
First published 11 April 2024, 06:00 AM
Last updated 11 April 2024, 09:00 AM
The city’s typical advertised rent in March surged to $560 a week from $495 in March 2023, new research from PropTrack revealed, increasing by more than 13 per cent in 12 months.
The rent increase was the largest recorded across all all capital cities except for Perth.
PropTrack senior economist Paul Ryan said there was a lot of competition in Melbourne’s rental market and tenants were being forced to use more of their income to pay their lease commitments.
Still, the city’s median rent price remained lower than the national average of $600 a week, which Mr Ryan said was allowing tenants to offer more than a rental’s advertised cost.
“We have low rental availability pretty much everywhere across the country but those places where rent is more affordable is where people still have the income to bid up rent,” he said.
“In places like Brisbane and Adelaide where we saw very low rental growth but still very tight rental markets, essentially, rent price pressures have reached the limit of what people are able to pay.
“In Melbourne, that’s not yet the case; I see Melbourne catching up to definitely Brisbane in the coming year at $600 a week.”
This three-bedroom house at 14 The Gateway, Croydon South is available to lease.
It’s listed for $560 a week, Melbourne’s median advertised rental price in March.
While Victoria’s Housing Statement released in September last year aims to outlaw all types of rental bidding, this has yet to officially become legislated.
The statewide rental vacancy rate was 1.13 per cent in March, with Melbourne slightly lower at 1.12 per cent.
Nelson Alexander chief executive James Keenan said other than the increase in Victoria’s population, the greatest single factor for what was driving up rental prices was the total supply of homes to lease diminishing.
This two-bedroom apartment at 8/97 Chomley St, Prahran is listed for rent.
It’s listed for $560 a week, Melbourne’s median advertised rental price in March.
He said investors were thinking more carefully about their long-term strategy amid increased regulation around leasing out one of their properties and increased land taxes.
“We have an increasing population, an inability to deliver homes at a rate that meets the population growth around construction and a shrinking commodity,” Mr Keenan said.
“You’re seeing quality property on the market right across Victoria at a scale we haven’t seen for a while.”
According to PropTrack data, around a third of Melbourne’s residential sales in the first quarter of this year were from investors selling off their properties.
Mr Keenan added that it seemed counter-productive that the Victorian government who were creating housing initiatives were also the ones shrinking the existing rental pool at the same time.
It comes after new PropTrack data recently revealed that hundreds of Melbourne suburbs home prices outpaced interest rate hikes in the past year, with experts confident that growth will soon accelerate.
