The combination of returning international students and a shift in tenant behaviour, who are seeking a return to inner city living to be closer to workplaces, coupled with a reduction in rental listings has seen a sharp recovery sweeping across Melbourne’s rental market.
Domain’s June 2022 Rent Report has revealed unit rents surged 5.1% over the quarter (more than any other Australian capital city), and an impressive 10.8% over the year to $410 a week. This is the second steepest quarterly rise on record and has resulted in the sharpest annual increase since 2008.
The lower affordability barriers of unit rents as opposed to houses, are proving more attractive for tenants and continues to support a price recovery. This became particularly evident over the June quarter, with the percentage increase in unit rents more than double the rate of houses (2.2%).
Inner Melbourne units are front and centre of this recovery, surging $45 over the quarter.
The vacancy rate continues its path to recovery, dropping to its lowest point since February 2020, at 1.5%. It declined for the sixth consecutive month and means vacancy rates in Melbourne are edging closer to the 1.1% record low of 2018. If Melbourne unit rents continue to rise at the current pace, they are on track to set a new record high during the spring quarter.
Domain’s chief of research and economics Dr Nicola Powell, stated in June that Melbourne’s market had changed from one where tenants had a choice of rentals and could negotiate on price to one where landlords were far more in control.
For investors looking to get into the market, the evidence suggests now is the time to do so. Beyond the financial initiatives currently available and fast leasing times (fewer than two weeks), West Side Place also offers luxury living in one of the city’s best positions. You can read more about what’s on offer here.
To request apartment floorplans and pricing information, send an enquiry here. Our Sales Suite located at 250 Spencer St, Melbourne is open Wednesday-Saturday from 1-5pm and Sunday-Tuesday by appointment.