Renters face record highs despite market shift

RENTS remain at record highs across Greater Geelong and the Surf Coast, but Domain’s latest rent report suggests the market is showing clearer signs of slowing down, as rental prices mark their slowest annual growth in four years.

However, Domain’s researchers say renters are unlikely to be “cracking open the bubbly” any time soon.

Across the Surf Coast, the median asking price for rents for houses has increased by 1.5 per cent in the last March quarter, rising $10 to $670 a week, with the region now recording the highest median rental costs of any local government area in Victoria.

Greater Geelong has fared only slightly better, recording a median rental asking price of $500 per week, up two per cent, placing it at eighth in the top 10 list of Victorian LGAs with the highest median rental costs.

Domain national property editor Alice Stolz said the rental market, both regionally and in metro Melbourne, had gone through an “incredibly unusual period” and it would likely still be years before renters began to see “the light at the end of the tunnel” despite signs of stabilisation within the market.

“It’s a tricky story to tell because for many landlords or investors who own property, they’re seeing their tenants probably finding it marginally more affordable. Except, having said that, the flip side is for renters, they’re still paying record high amounts.

“It’s a pretty bitter pill to swallow, this idea that things are actually getting better.

“But when you step back and look at those rental amounts… you can see it’s really slowing down and nowhere near the double figure [increases in median rental asking prices] that it was a year or so ago.”

For those living in Greater Geelong or on the Surf Coast, where increases sit well below the annual rental price growth recorded in areas of the state such as Mansfield (14.6 per cent), Moyne (11.1 per cent) and Baw Baw (10.6 per cent), Ms Stolz describes it as “the best of a bad situation”.

Vacancy rates across Victoria have also risen to 1.2 per cent, the highest for the month of March since 2022, but the figure remains well below the two to three per cent vacancy rate that indicates a “healthy market” and tough competition for rentals persists.

The low vacancy rates, Ms Stolz said, would likely continue to put pressure on rental prices across the region, which she said indicated the importance of increasing the country’s housing supply.

“My feeling is that any government should be doing everything they can to help with supply and demand, because without supply, we’ve got nowhere to go and that’s ultimately what’s continuing to really push up prices to the levels that we’re seeing at the moment.”

Regionally, she suggested, supply has also been affected by an influx of former city-dwellers seeking more affordable rentals, and policies that disincentivise investors to enter or stay in the rental market.

“The sooner we can get people who want to actually buy out of the rental market, the sooner we’re going to have a bit of a relaxation around that rental market.

“But I also think what we need is wages to grow in line with what we’re seeing the rental market grow at.”