Melbourne is now on par with Adelaide as the cheapest city in Australia to rent a home, according to Domain’s latest Rent Report.
So, why are we experiencing comparatively low rental prices?
Before delving into the cause of these price drops, it is worth taking note that not all Melbourne suburbs are experiencing these record lows. In fact, some Melbourne areas and property types are seeing rental increases. As an example, the Mornington Peninsula was one Melbourne region that experienced a rental increase. In the past three months, house rents in the region went up 2.2 per cent and unit rents 4.3 per cent. While Philip Webb offices have seen huge demand from tenants for two-bedroom units and three- and four-bedroom houses in Melbourne’s outer east.
However, Melbourne’s CBD has suffered an almighty blow. Last year, the city took a massive hit from COVID-19 and Melburnians have fled from the CBD, some moving as far as regional Victoria. Larger three- and four-bedroom homes with backyards became in demand while apartments in Melbourne’s inner-city were deserted.
Also impacting Melbourne’s inner-city rental prices is the collapse of overseas migration and international students. These groups previously occupied a large portion of inner-city accommodation prior to last year. To combat the lack of demand, rental providers have had no choice but to drop rental prices.
Residential rental providers have had to face a lot of setbacks, and some are selling their investment properties out of fear. My advice is to look further ahead and ride the ebb and flow – property is a long-term game. Australian borders will soon reopen and demand for rental accommodation will again surge.
To chat further about the state of Melbourne’s rental market, or if you have any questions regarding an investment property, call us today.