There is no doubt that the rental market is competitive, however as we head further towards the cooler months, it appears that there is slightly more room to breathe for Melbourne’s inner city renters. The latest data released by the Real Estate Institute of Victoria (REIV) shows that following on from a tightening of the vacancy rate in March, April saw a more balanced rental market, with the vacancy rate increasing to 3.2 per cent.
Rental supply improving
Looking back at the first few months of the year, median house rents in Melbourne have been slowly trending upwards, largely driven by reductions in the vacancy rate.
In January, the vacancy rate was 3.6 per cent and by March it had reduced to 2.8 per cent, translating to an increase in asking rents of 3.7 per cent from $381 per week to $395 for a house:
REIV Policy and Public Affairs Manager Robert Larocca said that the vacancy rate for Melbourne increased from 2.8 per cent in March to 3.2 per cent in April. The median rent for a house dropped by three per cent from $395 to $382 per week.
“The rental market is showing the impact of policies over the past few years that were designed to boost the supply of dwellings. ABS dwelling completion data for Victoria shows that in the last three years, 24 per cent more homes were built than in the preceding three years.
“This is particularly evident in the inner city (0-4km) where the vacancy rate is now 4.4 per cent, an increase from last month’s 2.8 per cent.
“From an investors perspective the strongest demand is for 3-bedroom houses in the inner city and in the middle suburbs. In both cases, the median advertised rent is slowly trending upwards.
“Rents for houses in the middle suburbs are recording reductions whilst in the inner and outer suburbs they are stable.
Regional Victoria remains stable
According to Mr Larocca, “’In Regional Victoria, the vacancy rate remained stable at 3.3 per cent with Geelong recording a vacancy rate of 4.4 per cent compared to 3.1 per cent in Bendigo and 2.2 per cent in Ballarat.
“Median asking rents for houses in Regional Victoria have fallen by two per cent this month and are now at $295 per week.”