Interstate tenants flee to Melbourne for cheaper rent despite surging prices

While some Melbourne suburbs have experienced up to 40 per cent rent rises in 12 months, tenants from interstate are flocking south. SEARCH YOUR SUBURB

39 Jetty Rd, Werribee South is listed for rent, located in a suburb where the median lease value has risen by 33 per cent.

People are fleeing other capital cities for Melbourne’s cheaper rental market, despite new figures showing rents has risen as much as 40 per cent in some areas in just one year.

A few years after the world’s longest Covid lockdown saw thousands of people exit the city, it seems the pendulum is swinging back as they look to escape higher rents across the nation.

New research from PropTrack revealed weekly lease commitments had increased as much as $450 extra a week, with Melbourne’s inner suburbs taking the biggest hit.

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Toorak, Werribee South and Heidelberg West median rental costs for houses skyrocketed more than 27 per cent in the 12 months to July.

For units, renters in Ashburton, Blackburn South and Keysborough were the worst off, with tenants needing to fork out as much as $205 dollar extra a week compared to 12 months ago.

But PropTrack senior economist Paul Ryan said Melbourne rentals remained relatively good value compared to the rest of the nation, which was bringing renters from other states and territories to the city.

“Typical rents for houses were like $580 (a week), that’s cheaper than every other capital city except for Hobart,” Mr Ryan said.

“More affordable rent is something that brings people to Melbourne.”

He added that rental markets across the country were very challenging so he wasn’t surprised if people were taking drastic measures to alleviate financial pressures.

“I had a friend who moved to Melbourne from Sydney, partly because his rent went up in Sydney,” he said.

223 Liberty Parade, Heidelberg West is listed for rent, located in a suburb where the median lease value for houses has risen by nearly 27 per cent in just 12 months.

The three-bedroom house is listed for $550 a week.

Easy Peasy Removals owner Bobby Alonzi said his business had doubled the amount of trucks moving residents from Sydney to Melbourne in the past 18 months.

“So a lot of the big corporate jobs out there in Sydney, people don’t need to be there anymore,” Mr Alonzi said.

“They were able to go do a work from home scenario, they ran away from Sydney as fast as they could.”

He said the rental market in Sydney was “far too expensive” but Melbourne was starting to catch up, which was why those he was moving from New South Wales weren’t moving into affluent suburbs such as Richmond or Abbotsford.

“The outer suburbs or regional Victoria are very common places that people from Sydney are going.”

Removalist booking platform Muval chief executive James Morrell said there were more people moving to Melbourne than out of the city – it had net positive migration – as opposed to other capital cities such as Sydney, Adelaide and Brisbane.

“Historically, Melbourne was seen particularly in comparison to places like Brisbane as being a more expensive option,” Mr Morrell said.

“Now, with what’s happened in the Queensland housing market, Melbourne starts to not only be a great drawcard for all those ‘great places to live’ factors but also on a cost basis as well.”

6/20-22 Canterbury Rd, Blackburn South is listed for rent, located in an area where leases have increased by about 25 per cent.

The two-bedroom townhouse is listed for $625 a week.

Better Renting executive director Joel Dignam said he’d heard of plenty of people moving from Sydney to Melbourne.

He said what they’d been hearing from renters is that they were basically at their price limit, which had the pace of rents slowing.

“They’ve already cut back so far. And then, of course, there are other pressures on other parts of their budget,” he said.

“Landlords can’t ask for more money because people can’t pay it.”

He added that people had also adapted to surging rental costs by changing how they lived.

“There’s evidence that there’s been a bit of a shift back towards having more people per household as a way of trying to reduce the costs,” he said.

“I think people can only spend so much and are finding ways to try to reduce that, which often aren’t optimal for them in their life circumstances, but people do what they have to do.”

SUBURBS WITH BIGGEST ANNUAL JUMP IN RENT (HOUSES)

Suburb - Median Weekly Rent July 2023 - Median Weekly Rent July 2024 - Change %

Toorak - $1050 - $1500 - 42.9%

Werribee South - $450 - $600 - 33.3%

Heidelberg West - $410 - $520 - 28.8%

Beaumaris - $908 - $1150 - 26.7%

Balaclava - $750 - $950 - 26.7%

Black Rock - $1000 - $1250 - 25%

Oakleigh East - $520 - $650 - 25%

Box Hill - $530 - $660 - 25%

Box Hill South - $565 - $695 - 23%

Box Hill North - $530 - $650 - 22.6%

SUBURBS WITH BIGGEST ANNUAL JUMP IN RENT (UNITS)

Suburb - Median Weekly Rent July 2023 - Median Weekly Rent July 2024 - Change %

Ashburton - $545 - $750 - 37.6%

Blackburn South - $478 - $600 - 25.7%

Keysborough - $490 - $600 - 22.5%

Blackburn North - $450 - $550 - 22.2%

Fawkner - $410 - $500 - 22%

Kingsbury - $370 - $450 - 21.6%

Forest Hill - $433 - $520 - 20.2%

Bentleigh - $500 - $600 - 20%

Burwood East - $500 - $600 - 20%

Doncaster East - $500 - $600 - 20%

Source: PropTrack

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