- Melbourne’s rental vacancy rate seems to have peaked
- The city's vacancy rate rose from March through to September 2020
- Things have stabilised recently at 4.4%, albeit well above the national average of 2%
The roller coaster of Melbourne’s rental vacancy rate is on the way back down again, having peaked at 11.8% in September 2020 (postcode 3000). For greater Melbourne as a whole, vacancies peaked at 4.7% in November.
For most of the 2010’s decade, the percentage of vacant rental properties fell, from about 3% down to 1.6% in early 2019.
While the rate bounced around in a seasonal manner for much of the period, peaking over Christmas and falling to lows in Easter, it was fairly predictable.
Then came Covid and no less than three lockdowns (the middle one lasting 110 days).
Coming off its normal summer highs around 3% this time last year, Melbourne’s vacancy rate started rising alarmingly from March 2020 through to September, rising to 4.7%. For postcode 3000 (inner-city Melbourne), the rate ballooned to 11.8%.
Since then, the rate has just come off a bit, but remains relatively high at 4.4%.
By contrast, the rest of the country has a vacancy rate of 2%. In other capital cities, the rates are far lower. Over in Perth, the rate has been stuck below 1% for the past five months. Sydney has had a similar run to Melbourne, and in January 2021 had a vacancy rate of 3.2%.
With an oversupply of rentals one would expect a decline in rent prices, and this is what we find. Weekly rents for houses and units fell from $658 and $589 respectively in March 2020 to around $400 a week for either today.
The three lockdowns that Melbournians have lived through have also had their impact on the rental market. Some city dwellers fled the capital for regional areas, to they could work remotely.
With matters returning to the new normal in 2021, so the rental market is reverting back to its long term average, albeit still above that level.
