Melbourne real estate: Full list of cheapest rentals by suburb revealed

Whether it’s houses or units, there are bargains to be had as Melbourne’s rental market struggles to overcome the pressures of Covid. Here’s where the cheapest deals are.

Melbourne renters are in the box seat to get a better deal as the local market struggles to overcome the pressures of Covid.

New data from property research firm CoreLogic shows the median rental price for dwellings dropped 0.4 per cent in July when compared to the same time last year.

Units were the main driver of the fall, with a typical home of this type costing 4.9 per cent less each week — the worst result when compared to Sydney, Brisbane and Adelaide.

It’s thought a fall in demand for inner-city apartments was behind the drop.

Houses performed slightly better, with the median weekly rental price growing almost three per cent. Though the three other capital cities put that result to shame, having all recorded growth of more than 7 per cent in this category.

CoreLogic’s head of residential research Eliza Owen said stock numbers for houses and units available for rent totalled 35,000 — more than 13 per cent above the five year average, with supply outstripping demand and likely suppressing price growth.

This three-bedroom house in Delacey St, Maidstone is currently available to rent for $420 a week. Maidstone was found to be the cheapest place to rent a house within 10km of Melbourne's CBD. Picture: Realestate.com.au

“When you look at the softest annual performance in rent, those areas are largely comprised of Melbourne and Sydney, and they’re largely comprised of pockets in those cities that have a lot of units,” Ms Owen said, adding that the fall in overseas migration due to border closures had weakened demand for unit-heavy areas.

She said the number of people leaving Melbourne may have also contributed to the sluggish rental price growth.

“Migration figures over the past year show there has been an uplift in movement from Melbourne to Queensland,” she said. “So that may have helped ease rental pressures across Melbourne and put upward pressure on Brisbane rents.”

“The other factors come back to income. So where you’ve had less lockdowns across Brisbane, Adelaide and smaller capital cities, that means that incomes have been less disrupted, which has supported rental growth.”

Among Melbourne’s better performing areas for rental prices were the inner-south and inner-east, Ms Owen said.

CoreLogic data has also revealed where it is cheapest to rent within 10 kilometres of Melbourne’s CBD.

Maidstone, where a typical house will set a renter back $424 a week, was found to be the most affordable, while Kingsville was the cheapest for smaller homes with a median unit price of $341 a week.

On the other end of the spectrum, the well-heeled suburb of Toorak had the highest median price for houses at $1202 a week. For units, it was Kooyong, where the weekly rent for a typical property of this kind was $570.

Market activity in Melbourne appears to be on the rise though, with the number of inquiries for Greater Melbourne properties up more than 15 per cent in July compared to the previous year.

REA Group director of economic research Cameron Kusher said renters were turning their backs on inner-city apartments, while outer- and middle-ring suburbs were performing better.

“There’s still not a lot of demand for inner-city apartments, and historically areas like Sydney, Melbourne and Brisbane have been the biggest rental markets for these properties in most capital cities,” Mr Kusher said.

“But what we’re finding the outer capital city markets are very tight; properties are renting very quickly and prices are rising, and it’s a similar story in a lot of the regional areas as well.”

Mr Kusher said the growth was likely caused by people moving out of the city amid the Covid pandemic.

“But I get the sense that some of those people aren’t fully committing to that, because when Covid is under control businesses may want staff to be in the office more frequently, so I guess there’s a reluctance to fully commit. And I suppose people want to try out living in those areas before they fully commit.”

Originally published as Melbourne real estate: Full list of cheapest rentals by suburb revealed