Demand is strong and supply is down for Victoria’s rental market as vacancy rates dip to record lows.
Record Low Vacancy Rates
According to Real Estate Institute of Victoria data Metro Melbourne’s vacancy rate went down to 2.5% in December 2022, this figure was 5.3% just 12 months earlier. Vacancy rates have plummeted for the RT Edgar office, as low as 1%, a 16-year low.
Decreased Supply in the Market
In January 2022, South Yarra had approximately 900 properties available for rent, as compared to a mere 174 properties available today, according to Business Development Manager Taylah Cagalj. “There’s been a huge shift in the market and properties are flying off the shelves within three to seven days of listing, with near 30 groups through open inspections and multiple applications.”
Growing Demand for Modern and Updated Properties
There is pent up demand for modern and updated larger family homes, in Toorak, South Yarra, Brighton and surrounds, in the $2000-$4000 per week price bracket. While well-maintained, or recently updated properties in the range of $350-$750 per week are leasing within a matter of days, typically after one inspection with a multiple offer scenario.
Competition in the Rental Market
“There has definitely been an increase in people looking for share house accommodation with cost of living rises,” Ms Cagalj said. “With growing competition, rental seekers are offering higher rents, longer lease periods and offering to pay a few months in advance in order to stand out and be more favourable.”
Rising Rental Prices
In good news for investors, Melbourne’s median rent price has seen a 9.6% rise to $507 in the months since January 2022. There has been a lot less movement of renters, people are staying in leases longer to avoid going back out to market, even with price increases. “Investors scouring the market, South Yarra has been the most in demand suburb,” Ms Cagalj added.
Advice for Property Seekers
To ensure their success, Ms Cagalj is advising property seekers and hopefuls to ensure their applications are completed sufficiently with all requested information, that referees have been contacted in advance and work emails are provided over personal emails. “There’s a lot of competition for each rental listing so it’s important the application is up to date, also providing a description as to why you are looking to rent and why you would make a great tenant, will also work in your favour,” Ms Cagalj said.
Ms Cagalj encourages all property seekers to introduce themselves to the agents at open inspections, make your self known and have a chat.