The once-booming Victorian towns where rents are at a discount

Rents in once-booming Victorian regional areas are slowing and even falling in some pockets, as the rush of Melburnians seeking a sea or tree change reverses.

Rents have dipped in a handful of regional markets as workers return to offices in the city and tenants’ budgets are pushed to their limit, experts say.

Surf Coast rents are more expensive than those in Melbourne.Credit: Jason South

Asking rents for houses in the Alpine Shire, including Bright and Myrtleford, recorded the largest fall over the 12 months to December, down 7.8 per cent to a median of $475 per week, Domain’s latest Rent Report revealed.

It was one of the most popular areas to escape to during the pandemic lockdowns, and despite recent declines, the weekly median was still up 58.3 per cent over the past five years.

It was a similar story in the Wellington and Mansfield shires, where advertised house rents fell 2.3 per cent and 1 per cent, but were still up by more than 35 per cent since 2018.

Rents in regional cities did continue to rise, but at a slower rate, rising 2.6 per cent in Ballarat, 4.3 per cent in Greater Geelong and 5.9 per cent in Greater Bendigo.

Domain’s chief of research and economics Dr Nicola Powell said house and unit rents in regional Victoria remained flat for the second consecutive quarter, pointing to a more stable market, even though rents remained expensive.

It was similar to the trend in Melbourne, where rents held steady at record highs over the December quarter.

“The rush to regional areas is reversing,” Powell said. “That [COVID] demographic shift that impacted the rental market in regional areas is now in the rearview.

Some of those who moved to regional areas during COVID lockdowns are now moving back to the city.Credit: Steven Siewert

“As people go back to the office two to three days a week … they are moving back to the city,” she said.

But some regions – particularly more affordable areas – still recorded sharp increases, as tenants sought better value for money amid the cost-of-living crisis.

Swan Hill and Corangamite shires had the largest annual rent increase, both up 17.1 per cent to $410 per week. Moyne and Golden Plains also recorded double-digit rises of 12.5 per cent, as did Indigo (11.6 per cent), Warrnambool (11.1 per cent) and Ararat (10 per cent).

Regional Australia Institute’s chief economist Kim Houghton said the organisation’s research showed city dwellers were continuing to flock to the regions at a higher rate than those moving in the opposite direction – respectively accounting for 11 per cent and 9.1 per cent of relocations nationally over the year to September.

“The numbers of people moving to regional areas are down from the massive peak in 2020 and 2021,” Houghton said. “But even so, the numbers moving to regional areas are still elevated compared to pre-COVID.”

He said rents were still expensive in areas that were considered “high amenity”, like Victoria’s Surf Coast, which had prompted tenants to bypass rentals there. The median weekly rent for a house on the Surf Coast is $650, compared to Melbourne’s median of $550.

“People are now looking for somewhere that’s a better mix of amenity and price, further away from these areas,” Houghton said. “It’s really people voting with their feet.”

Houghton expected rents in regional Victoria to continue to rise as international migrants moved there, adding to demand. “There’s no sign that that’s going to abate,” he said.

In Corangamite, where rents jumped, Ray White Timboon principal agent Gerard Delaney said demand remained strong amid limited supply.

Local tenants had been making moves to more affordable properties as cost-of-living pressures put the squeeze on those hoping to buy a house.

“There’s a lot of pre-listing interest from people getting in touch for a rental,” Delaney said.

“The vast majority are local people [looking to rent], while a small proportion are visiting professionals.”

Four Peaks Real Estate property manager Elley Fraser said the Alpine rental market had changed since people returned to the city for work.

“During COVID we had a lot of people from the city who were able to work from home, choosing to relocate to the country where we didn’t have strict COVID rules and lockdowns,” Fraser said.

“We had an increased demand for properties and a lack of supply, which led to application numbers per property increasing dramatically, and with those applications came offers of much higher rental amounts so that people could secure a home.

“[Now] we aren’t seeing those extreme application numbers and the market has also eased off slightly, with properties being advertised for longer.”