- 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.”
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.”