Megan was evicted from her home. Her search for a new one reveals the budget battle facing renters

Melbourne asking rents are at a record high, and more pain could be on the way if actual rents catch up.

But in a glimmer of hope for people struggling to survive the cost-of-living and rental crises, rents have stopped climbing for the first time in two years.

Melbourne’s asking rent for houses remained at a median of $550 per week over the September and December quarters, and units were similarly stagnant at $520 a week, according to Domain data.

However, both grew over the year, up 14.6 per cent and 15.6 per cent respectively.

Despite Melbourne’s lockdowns, unit rents are now almost 24 per cent higher than in December 2019, and house rents almost 28 per cent.

“This is such a turnaround compared to what we had been seeing,” Domain heard of research and economics Dr Nicola Powell said. “For Melbourne, this is the longest and steepest stretch of rising rents we’ve seen. We’ve seen eight back-to-back quarters of growth, both for houses and units.

“The fact that growth has stalled [shows] that the rental market has turned a corner.”

Vacancy rates edged up to 1.2 per cent but were at the lowest level recorded in the month of December, Powell said. A vacancy rate of about 3 per cent is considered “healthy”. The last time it was above this benchmark was in December 2021, according to Domain data.

“It’s the most competitive changeover season that tenants have ever experienced,” Powell said.

She said rent growth could be slowing due to prices hitting an affordability ceiling in the cost-of-living crisis, plus a change in behaviour among tenants and a reversal of the lockdown-era trend of people choosing to live in larger homes with fewer people. However, the “turnaround” was yet to improve market conditions for struggling renters.

Megan Masters and cat Juno were happy to find a new home in better repair, but she says most homes that would be considered affordable were substandard. Credit: Chris Hopkins

Coburg renter Megan Masters was recently evicted from her home of nearly 15 years after a long-running dispute about the unit’s state of repair.

“A pipe burst under the vanity … every weekend I’d be lying in bed with a headache, probably from the black mould exposure. But after that pipe burst, the black mould got worse,” she said. “I started making a bit of noise about it and I think that hastened [my eviction].”

Masters said many of the units she inspected were in similarly poor condition.

“I was looking for properties first around the $400 mark. There were so few at that price point I was looking around $500 a week. That’s basically half my net income, but the priority was looking for somewhere to live. Some of the properties I was looking at at $400 per week, I thought, ‘How did these even pass the minimum standards?’

“There were some that had fixtures and fittings from the ’70s and ’80s asking for higher rents than places that were a lot newer. I thought: ‘How the hell could they justify that?’ ”

Masters revealed the state of her previous rental through TikToker and renters’ advocate Jordan van den Berg’s social media platforms; she believes speaking out also led to her eviction.

Van den Berg said improving market conditions were unlikely to support tenants’ rights in the short or long term.

“I’m still seeing exactly what I saw with Megan. We have very strong protections in Victoria for renters. What we’re seeing is, as long as people need housing, which will be always, landlords know they can find someone to live in their house,” he said. “If someone enforces their rights – is ‘difficult’ – they’ll just find someone else.

“The only time we’ll actually see [change] is if the government is the one to independently enforce their legislation instead of relying on tenants to do it.

“What we’ve got at the moment is the equivalent of a crime being committed in your house, the cops showing up, handing you the crime act and being like, ‘go for your life’. They’re absolving themselves of enforcing their own legislation.”

The state government last year delivered a housing statement committing to an easier dispute resolution process, a portable bond scheme, a ban on rental bidding and a ban on raising rents for new tenants after evicting the prior tenant. It has yet to be legislated.

Grattan Institute economic program policy director Brendan Coates said that while asking rents had stalled, actual rents would continue to rise for some time.

“People in existing leases have not seen anywhere near the increases as people who have had to move. The fact that advertised rents have stopped rising is a positive step, but you would expect the actual rents to keep rising for a year or two,” he said. “All being equal, those two should equalise.

“If asking rents stay at that level, we would see actual rents go up 20 per cent. But if they were to fall, they would converge at a lower level.”