Revealed: Hardest postcodes to find a rental in Victoria

Victorians looking for rentals in outer eastern Melbourne and Geelong are struggling more than anyone else, with just one property put up for rent in December in each place.

Victorians looking for rentals in outer eastern Melbourne and Geelong are struggling more than anyone else, with just one property put up for rent in December in Upway, Montrose and the regional city.

New data reveals a stark picture for Victoria’s rental market with a significant decline in available properties and experts warning it will only get worse.

Melbourne suburbs Upwey and Montrose advertised just one rental available in each in December, while suburbs in the local government area of Cardinia listed two properties available to rent across six suburbs.

In regional Victoria, Geelong was the worst postcode for renters with one property listed, while Creswick, Daylesford, Ballan had two available listings.

MCG Quantity Surveyors’ managing director Mike Mortlock said while there was a national crisis of rental accommodation, property investors were particularly avoiding to invest in Victoria due to the introduction of the new land tax.

“The land tax introduced by Andrews government is compounding on top of the minimum standards legislation which is resulting in people avoiding the state of Victoria, from a property investment point of view which immediately is constricting supply,” he said.

The controversial land tax, which will be paid by 380,000 Victorians in an attempt to pay down part of the government’s “Covid debt” worth $32bn.

Any property owner who pays land tax on properties worth more than $50,000 will cop the hit, lowered from the previous tax-free threshold of $300,000.

It is not levied on family homes, primary production land, charities and residential care facilities.

Mr Mortlock said Victoria’s rental market relied on property investors who provided about 90 per cent of rental accommodation but said the introduction of the extra tax was seeing them leave the state.

“Property investors are voting with their feet and leaving Victoria to purchase in other locations and selling up their investment properties,” he said.

“The overall trend is tighter vacancy, which puts upward pressure on prices and makes it very hard for people looking for a rental property.”

Mr Mortlock said it was too soon to say with statistical certainty the land tax changes made things worse, however he said data pointed to a decrease in investment in Victoria as opposed to other states like Western Australia and Queensland.

“It is a painful time; our research is shows there is an opportunity for investors because these areas are really tight markets but no investors sees this as a positive thing,” he said.

“If you purchase an investment property, you can rent it out straightaway and get a good price for it but the rapid pace of rental growth just makes it very hard for people to suffer those increases, not dissimilar to the increase in interest rates,”

“It’s important for politicians to recognise the part property investors play in solving rental crisis...the only real short term way to fix it is for a higher participation from investors.”

It comes after data revealed people in regional Victoria were spending a smaller percentage of their wages on rent than those in Melbourne.

Northwest Victoria fared the best in rent-to-income ratio by shelling out 17.46 per cent of their income on rent, followed by Ballarat with 18.19 per cent.

Posh and popular Melbourne areas — Inner South, South East and Mornington Peninsula fared the worst with people in these areas chucking more than 20 per cent of their income in rent.