Victorian rental vacancy rates at record lows

THE REIV’s latest data show that Victoria’s rental vacancy rate has dropped to its lowest level of 1.8 per cent since they began collecting the data in October 2002.

REIV president Richard Simpson said a vacancy rate of at least three per cent is required for a healthy rental market: where there is enough vacant housing supply to meet demand.

“Population growth, lifestyle trends and property price growth are all having an impact on rental vacancy rates in Victoria,” Mr Simpson said.

“These record low figures coincide with the Victorian Government’s introduction of proposed changes to the Residential Tenancies Act which strip away landlords’ rights to control what happens with their investment property.

“The Bill, which is currently before the Parliament, is likely to result in increased competition for rental properties, greater screening of tenants and will place more pressure on rents if it is passed in its current form.”

At 31 July, the vacancy rate for Inner Melbourne was sitting at 1.8 per cent, Middle Melbourne’s was 2.5 per cent while Outer Melbourne was 1.6 per cent contributing to a Metropolitan Melbourne median vacancy rate of 1.9 per cent: the lowest in a decade.

The rental vacancy rate for Metropolitan Melbourne was lowest in June/July 2008 at 1.7 per cent.

Rental vacancy rates have also continued to decline in Regional Victoria over the last 15 years and are now at an all-time low of 1.5 per cent (compared with 2.3 per cent in July 2017).

Mr Simpson said the rental market is already highly competitive with solid turnouts at open for inspections, which will only increase as the busy spring period approaches.

“While the availability of rental stock is at a record low, the cost of renting a home has risen in most areas,” Mr Simpson said.

“The median weekly rent for a house in Metropolitan Melbourne was $450 in July 2018, compared with $425 in July 2017.

In Regional Victoria, the median increased from $310 to $330 per week.

“With Victoria’s fast-growing population and financial institutions restricting lending to investors, we cannot see the situation improving for renters in the short to medium term.”