Melbourne becomes the cheapest capital city to rent a house in Australia Domain Rent Report

 

 

Melbourne is now the cheapest Australian capital city in which to rent a house, as new data reveals the grim impact of COVID-19 lockdowns on its rental market.

 

Overall, the cost of renting a house did not fall over the September quarter, the latest Domain Rent Report found, but it didn’t rise either – and Melbourne has fallen to last place simply because the cost of renting has continued to rise everywhere else.

 

The report, released on Thursday, showed Melbourne’s median asking rent price of $430 a week has now been outstripped by every single other capital city, even Adelaide, where prices were on par with Melbourne just three months ago. Adelaide’s median rent price is now $440 a week.

Unsurprisingly, Melbourne’s rental market has suffered the effects of COVID lockdowns more than any other capital, coming off record-high rents in March last year. House rents are now $10 cheaper, while apartment rents have plummeted by $60 since then.

“It’s still quite astounding that Adelaide’s rents are more expensive,” Westpac senior economist Matthew Hassan said. “Tenants in Melbourne definitely have plenty of bargaining power at the moment.”

 

Lauren Allingham, director of Mayfair Property Management, said rents were still being reduced by up to $100 per week to attract tenants to suburbs such as the Docklands.

 

Other areas just three or four kilometres away were booming, she said, with some houses renting within a day of being listed, at a much higher rental price.

 

“Rents are definitely cheapest in the inner city and they grow as you get further out of the city, with some exceptions,” Ms Allingham said. “Families are definitely looking for more space.”

 

Domain chief of research and economics Nicola Powell said record-long lockdowns and the closure of international borders to students and expatriate renters, who traditionally make up a large part of Melbourne’s rental market, had taken their toll.

 

But tenants may not stay in the driver’s seat for too long. While rents were cheap now, Dr Powell said, vacancy rates in the city had begun to tighten.

 

“Rents are still well below what they were pre-pandemic but what we are seeing is the inner area of Melbourne’s house and unit rents rising marginally, so I think the bottom [of the rental market] has passed,” she said.

Cheaper rents and skyrocketing house prices were the key drivers behind Chris and Kylie Bellesini’s recent move to a rental home in Forest Hill, in Melbourne’s outer east, with their two daughters.

 

The couple wanted to be closer to family and schools but could not afford to buy a property there, so they took advantage of the current tenant’s market and rented instead, said Mr Bellesini, who works in the real estate industry.

“It’s just unaffordable to buy at the price level here … this house that we’re living in sold for $840,000 two years ago, but since then prices have exploded by more than $200,000.”

 

Mr Bellesini said he was hopeful of buying an investment property in another area of Melbourne that was more affordable, which the family could eventually move into.

 

Units saw a slight boost in numbers over the September quarter, though rents had fallen significantly since last year.

In the Inner region, which includes the inner city and Carlton, rents rose slightly in the September quarter, by 1.4 per cent to a median of $375 per week. However, across the year, they were still down by 10.7 per cent, data showed.

Phillip Webb chief executive Anthony Webb said he was “surprised but not surprised” Melbourne’s house rents were now the cheapest in the country, with unit rents struggling in some areas.

 

Tenants were always on the search for a better deal in rent, he said, with some moving to a different floor of the same building to pay less each week.

 

“The apartment rental market will continue to struggle until people, including international students and workers, come back to Melbourne,” Mr Webb said.

 

Westpac’s Matthew Hassan said it was too hard to tell right now what would happen once international borders reopened – earmarked for the end of the year – as vaccine and quarantine requirements would slow the return of international tenants.

 

“It’s very hard to imagine what the environment will look like after lockdown, but we could still get back towards the pre-COVID picture,” he said.

 

Ref: MELISSA HEAGNEY | SENIOR JOURNALIST  (on 14 Oct 2021). Melbourne becomes the cheapest capital city to rent a house in Australia Domain Rent Report. Retrieved from  https://www.domain.com.au/news/melbourne-is-now-the-cheapest-capital-city-to-rent-a-house-in-domain-data-1094890/.

 

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