The Melbourne suburbs where rents fell the most and tenants can find cheaper deals
Melbourne renters are taking advantage of cheaper deals beyond the hard-hit CBD in the sought-after inner suburbs, with discounts of 10 per cent or more during lockdown.
Potential tenants may need to get in quickly, though, with the rental market expected to pick up as the economy reopens and international students return when possible.
House rents are lower than a year ago in a handful of bayside and inner south-eastern neighbourhoods, the latest Domain Rent Report for the September quarter shows. Elwood house rents fell 10.2 per cent to a median $660 a week over the past year, while Balaclava fell 8.7 per cent to $575. Neighbouring St Kilda units are down 8.5 per cent to $375 a week.
House rents have also dipped in leafy Canterbury (down 12.6 per cent to $800) and Hampton East (down 10.5 per cent to $575).
Steep discounts have been on offer in the CBD since the international border was closed, where unit rents are just $370 a week, down 17.8 per cent in a year. Double-digit falls were recorded in nearby student-heavy neighbourhoods including Carlton, Docklands, North Melbourne and Southbank.
Domain chief of research and economics Nicola Powell said tenants were moving around to save money.
“We have seen such a stark drop in asking rents in the inner city, that is going to be very much a lure for a tenant to be able to cost-cut and save more,” Dr Powell said. “What we’re probably seeing is people moving from other areas into the inner city.”
Some tenants might choose to move out of shared housing and live on their own while working from home, while other households might be formed that would not otherwise have been created because of the pandemic, she said.
Melbourne renter and digital marketing manager Ailish Dempsey moved out of home and into a Richmond rental just in time for lockdown, with her friends, frontline nurse Belle Pollard and Kate Renney, an artist for new businesses.
Although they faced competition from other prospective tenants and even offered to pay slightly above the asking rent, they still managed to get a good deal on a three-bedroom house without parking permits.
“For Richmond prices it’s reasonably low, it’s $710 a week,” Ms Dempsey said. “We’ve got friends 400 metres away in Richmond paying upwards of $800.”
Bayside is proving a strong renter’s market, said McGrath St Kilda business development manager Joanne Pearson.
Hospitality workers on working holiday visas had to return to their home countries last year, leaving plenty of empty one-bedroom apartments, she said.
Tenants are now looking for two bedrooms with outdoor space and can find cheap prices, such as a two-bedroom, two-bath unit with a balcony she has listed for $430 a week that would normally command as much as $520.
“It’s almost unheard of,” she said. “We are still seeing enormous value for renters.”
Tenants were now chasing townhouses or family homes, especially larger houses in Elwood, to work from home by the beach, she said.
In the CBD, vacancy rates have improved since lockdown 2, with tenants moving to get more space or an inner-city lifestyle they hope will soon become more vibrant as Melbourne reopens, said Harcourts Melbourne City director Dionne Wilson.
She said she had seen her vacancy rate fall from 38 per cent to below 10 per cent, and expected it had ticked up this lockdown but would soon fall, and predicted rents could start to rise by the autumn.
She said she was seeing similar asking prices to three to four months ago.
“Most [landlords] are understanding – it’s pretty well publicised that Melbourne is the world’s most locked-down city; they are prepared to follow advice,” she said.
“There’s been a significant drop in rents across the board, whether it’s smaller or larger properties – there is an opportunity for a tenant to get more space for the same rent they were previously paying, or move into a different location.”
Although she despaired of many potential tenants booking a private inspection and not turning up, in a market where they had plenty of choice, she expected conditions to pick up and hoped the city would become more lively from next month as restrictions eased.
Ref: ELIZABETH REDMAN | SENIOR NEWS PRODUCER (on 17 Oct 2021). The Melbourne suburbs where rents fell the most and tenants can find cheaper deals. Retrieved from https://www.domain.com.au/news/the-melbourne-suburbs-where-rents-fell-the-most-and-tenants-can-find-cheaper-deals-1095519/.
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