Melbourne rental market sees vacancies ease, but remains worse than last year
The housing affordability crunch is pushing people further out into the suburbs. Image: Canva.
  • Experts say fewer available rentals are perhaps a symptom of renters remaining with the current property rather than risking it to find a new home.
  • The affordability crunch is seeing vacancy rates drop across suburbs further from the CBD.
  • Investors continue to leave or consider leaving the rental market.

Renting in Melbourne became marginally easier in November, with the PropTrack Rental Vacancy Rates November 2023 finding vacancy rates rose 0.03 percentage points (month-on-month) to 1.16%.

Despite this, the broader picture is still somewhat grim.

“Over the past year, Sydney (–0.27 ppt) and Melbourne (-0.44 ppt) have seen the sharpest falls in available rentals, placing exceptional pressure on renters,” said PropTrack senior economist and report author, Paul Ryan.

RT Edgar business development and leasing manager, Toorak, Taylah Cagalj, told The Property Tribune:

“We believe there are fewer available than in previous years as many renters are opting to stay in their current rental rather than compete with other renters in the current market,” said Cagalj.

“This is also resulting in less turnover and further reducing available rental stock.”

Renters searching further out from the Melbourne CBD

Cagalj said that in RT Edgar’s core market, predominantly between three to 10 kilometres east of the Melbourne CBD, she has seen vacancy rates stabilise and fractionally ease over the last four to six weeks.

“We monitor vacancy figures from the REIV and that reflects our own stats,” she said.

“Suburbs around 10 to 20 kilometres from the CBD have seen their vacancy rates drop further, which indicates to us that renters are expanding their search looking for better value and also more options in this competitive market.”

Investors selling up as mounting costs become unmanageable

A range of issues have been weighing heavily on investors’ pockets.

Cagalj told The Property Tribune that: “Investors have incurred a range of costs over the last 12 months being interest rate rises, costs to meet minimum standards and safety checks, land tax increases, and other cost rises such as rates, water and insurance premiums.”

“Some investors have or are considering selling due to all these increased costs, which will further reduce available rental properties around Melbourne.”

More broadly, the Melbourne regulatory environment has not been viewed favourably by some, with industry bodies calling out changes throughout this year, from taxes to other reforms.

The application lottery

Rental listings for Melbourne remain subdued, with the latest figures from SQM Research floating around the lows previously recorded in 2018.

Melbourne rental listings

Cagalj noted frustration amongst renters, with rental market applications more or less a gamble:

“… applying for a property is more like a raffle, now, as there are generally so many interested in each property. Higher living costs and higher rents are also causing a great deal of concern with renters.”

You May Also Like

Australian building costs have continued to soar, but has your insurance cover kept pace?

MCG Quantity Surveyors analysis found underinsurance could cost homeowners over $100K to replace a property, with the issue even more profound in the commercial property sector.

When will Australian property prices fall? One major challenge continues to prop prices up

Property prices are up by over 35% across the country since Covid, and while not the same story in each city, that’s little solace to prospective buyers pulling their hair out.

A window of opportunity could be open for savvy Australian property investors, but time is ticking

One expert has noticed investors are on the move while there’s less competition and fewer buyers in the marketplace.

Why Aussie property buyers aren’t waiting for rate cuts anymore

A surge in home loans shows buyers aren’t waiting for interest rates to drop before taking the plunge.

Top Articles

PropertyGuru Asia Property Awards (Australia) returns for its 7th edition, including several brand new award ...

This year's awards include several brand new categories, with entries closing 2 August 2024.

Thinking of borrowing for a new home? We decode the home loan lingo and explore ...

We take a look at everything from principal and interest to rates and more.

A window of opportunity could be open for savvy Australian property investors, but time is ...

One expert has noticed investors are on the move while there's less competition and fewer buyers in the marketplace.