Melbourne soon to become one of the cheapest cities to rent a home in Australia
- Posted By Ndl 1 Realty
Melbourne, one of the world’s most liveable cities, is now set to become the cheapest city to rent a property in Australia this year after its property market took a beating during the COVID-19 lockdowns, which resulted in a deep dive of rental demand.
A new Domain.com report shows falling house rents across Melbourne of up to 2.3 per cent on year, from $440 to $430. This is now the same as Perth and only five dollars more per week than Adelaide’s. While rents in Melbourne took a fall, other capital cities in the country are experiencing rising rents due to increased demand and extreme shortage of rental properties in the market.
Unit rents dropped by an enormous 12.8 per cent over the year to March quarter and are 2.6 per cent lower than three months ago. With a median rental price of $375 per week, renters are now paying the same price as they did in 2015.
The inner Melbourne region bore the brunt of the pandemic. This includes the CBD and the university suburbs of Carlton and Brunswick.
The main cause for this massive fall of rental demands are the border closures, zero immigration and a big portion of city residents leaving the city through the COVID-19 lockdowns. These residents have since never returned to the city. The capital city relied heavily on overseas students and migrants before the pandemic struck. Currently, landlords are struggling to find tenants to fill in their inner city units while borders are still closed.
According to Dr Nicola Powell, Senior Research Analyst at Domain, for the first time in history, Melbourne is now the second most affordable city to rent a house in Australia along with Perth and after Adelaide.
“Tightening rental conditions in Adelaide and Perth could push rents higher than in Melbourne in the coming months,” Dr Powell said.
If these conditions are met in both cities, then that would mean Melbourne could take the first spot as the most affordable city to rent in.
When borders reopen it won’t go back straight to normal though. However, it would be if rental providers are willing to wait it out over the course of 12 to 18 months.
In the new report, only the inner Melbourne regions saw the rent falls as the outer suburbs record stable prices and even rising rents as once inner city people came to look for more room to breathe in the outer parts.
The south-east region, which spans Mount Waverley to Berwick and Narre Warren, recorded a 3.7 per cent rise in house rents over the past year to a median of $420.