Melbourne rent prices forecast to skyrocket in the next 12 months | Suburb Advice

Alarming new research has revealed Melbourne’s rent prices could rise by as much as 18 per cent in some areas in the next 12 months. SEE WHICH SUBURBS.

Sarah Petty

3 min read

February 15, 2025 - 5:01AM

2 Aurora Rise, Sassafras is available to rent for $2980 a week or to buy for $4.88m.

Melbourne renters are facing rent hikes as high as $200 extra a week to service their lease in the next year.

Alarming forecasts from Suburb Advice reveal prices are set to surge anywhere from $26 to $196 in extra weekly payments across the city by 2026.

Those renting a house in the northeast face the biggest prospective rises, with the Bylands area near Kilmore tipped for a 16.1 per cent rise.

Tenants leasing a unit in the Cardinia area may have to find another $144 a week to keep their landlord at bay.

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Ray White economist Nerida Conisbee agreed that with high migration and a landlord exodus, Victorian renters were set for a tough 12 months ahead.

A property technology start-up, Suburb Advice analysed historical median rent prices, affordability measures and rental turnover rates to estimate how much rental costs could increase in each Melbourne suburb in the next 12 months.

INTERACTIVE: See the rents in every suburb

Suburb Advice founder Sam Saket said the strongest forecast growth was for areas with higher rental turnover and constrained supply, while more affordable markets were expected to attract more moderate increases.

“For renters, affordability remains a key challenge, with rent increases outpacing wage growth in several regions,” Mr Saket said.

“For investors, the data highlights locations where rental returns are likely to strengthen, making strategic property decisions more important than ever.”

This four-bedroom house at 55 Well Street, Brighton is available to lease for $1400 a week.

Brighton’s median rental price for a house is $1350 a week, forecast to rise by 13.2 per cent in the next 12 months.

He added that even though Victoria’s rental growth was slower than most other states, rental prices had always been relatively high.

At present landlords were passing on rising costs on their side caused by interest rate hikes.

Mr Saket tipped Melbourne unit prices were poised for bigger price rises than houses, as more people were being driven back to the office, and apartments were generally more affordable than houses to lease.

“A lot of companies have basically changed their work from home expectations … so there’s a higher demand to be closer to the city,” he said.

This four-bedroom house at 8 Rangeview Rd, Donvale for $850 a week.

Donvale’s median rental price for a house is $770 a week and is forecast to rise by 16.1 per cent in the next 12 months.

Ray White chief economist Nerida Conisbee said there had been quite a significant sell off of rental properties in Victoria, largely due to the increase in property taxes placed on investors.

“Not only does Victoria have a lot of population growth from international migration, it also has fewer investors,” she said.

“But we are expecting migration levels to fall back this year … so that might also help.”

SQM Research data released this week shows the number of available rental properties in Melbourne fell from 11,775 in December 2024 to 8047 in January this year — leaving about 1.5 per cent of potential rental homes vacant, compared to 2.2 per cent a year ago.

This three-bedroom townhouse at 2/11 Sunderland Ave, Ashburton is available to rent for $795 a week.

Ashburton’s median rental price for a unit is $820 a week, predicted to rise by 11.2 per cent in the next 12 months.

Ms Conisbee added that when interest rates began to drop, this would hopefully encourage more property investors to come back into the market, which could lead to an increase in rental properties — it just would take time.

Rental Search Australia co-founder Jade Costello said there was definitely still some room for rental price growth in Melbourne, with multiple tenants still applying for most homes.

“It is very rare that you would ever go to an opening (for a rental property) nowadays in Melbourne and you’d be the only applicant,” Ms Costello said.

“There’s not a lot of quality rentals out there … I think we’re probably losing a lot of them to sales just because land tax is so high.”

She added that many long-term rentals had also been lost to Airbnb in the past.