Renting in Melbourne: First sign of rise in new listings spells good news for renters
A rise in the amount of rental homes available in Melbourne has helped raise the city’s rental vacancy rate, providing a bit of hope for struggling renters.
A rise in the amount of rental homes available in Melbourne has helped raise the city’s rental vacancy rate, new data shows.
PropTrack senior economist Paul Ryan said the 0.13 per cent uptick in the city’s rental vacancy rate shows the first green shoots that the rental crisis could be turning around.
PropTrack’s figures show Melbourne’s vacancy rate rose from 1.23 per cent to 1.36 per cent over April as the amount of homes available for rent increased.
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Mr Ryan said the figures show it’s still incredibly tight for renters trying to find a home, but represented a significant loosening of conditions in the market, following six months of negative data.
“It’s still the case that things are very tight,” Mr Ryan said.
“There’s very few rental properties available, and rental properties are getting leased as soon as they’re advertised.”
But he said the trends showed the number of investors selling their rental properties had slowed dramatically, while more homes were coming on to the market.
There are still significant hurdles before the rental crisis can be considered over, including sorting out the supply chain and finance issues dogging the construction industry, he said.
“We are back to this position where rental properties are being brought to markets at a rate that is similar to pre-pandemic, so we’re seeing the rental stock growing again,” Mr Ryan said.
“If we continue to see this trend as rental vacancy rates continue to increase, we’ll hopefully see rental prices stop increasing at the rate we’ve seen over the past year.”
It’s still early days and the PropTrack data shows Melbourne’s vacancy rate is still 40 per cent lower than before the pandemic.
Mr Ryan said the data showed that increasing stock levels was the key to lifting the rental crisis.
He said immigration was getting close to pre-pandemic levels, but the higher amount of stock prior to 2020 kept a lid on rising rent prices.
“So the rental market can handle this amount of immigration, we need to get the supply side back to where it was before the pandemic,” he said.
While last week’s federal budget revealed more help for struggling tenants to keep a roof over their heads, is also added incentives to create more affordable housing and build-to-rent projects.
Struggling renters will get up to $31 extra a fortnight to help manage the costs of skyrocketing rents in what will be the biggest increase in Commonwealth Rent Assistance in 30 years.
The 15 per cent rent assistance increase will cost $2.7b over five years and will support around 1.1 million Australians, including the “most vulnerable”, Budget papers said.
An additional $2b will be allocated for investment in more social and affordable rental housing, effective July 1.
This support will see the liability cap of the National Housing Finance and Investment Corporation increase from $5.5b to $7.5b, allowing it to support more lending to community housing providers.
Tax breaks were also announced for build-to-rent projects as part of the federal government’s ongoing National Housing Accord aimed at building one million, new, well-located homes over five years, starting from 2024.
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Originally published as Renting in Melbourne: First sign of rise in new listings spells good news for renters
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