Melbourne rent crisis: More rentals available for second straight month as vacancy rate lifts

House for rent. Real estate sign. Front yard. No people.

Victoria’s rental vacancy rate has increased for two consecutive months.

Victoria’s rental vacancy rate has risen for two consecutive months, with experts suggesting there could be reprieve in sight for struggling tenants.

PropTrack research showed the state’s vacancy rate was 1.22 per cent in April, improving by 0.07 percentage points from March.

Latest Census data indicates there were 624,671 Victorian homes in the private rental market in 2021.

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Contrasted to PropTrack’s findings, it shows just 7621 properties would have been available to tenants in April who had several hundred more homes to choose from compared to March.

However, PropTrack senior economist Anne Flaherty said the state’s vacancy remained lower than what it was in January and below what it should be in a healthy rental market.

“While we are seeing conditions ease slightly, it’s very much a landlord’s market out there and it’s still incredibly competitive for renters,” Ms Flaherty said.

Ms Flaherty said poor rental market conditions had driven a number of tenants to buy their own home.

She added that surging rent prices, limited homes for lease and landlords selling their investment properties had driven a number of tenants to purchase their own abodes.

“There’s an increasing number of renters in Victoria who are exiting the rental market and becoming first-home buyers,” she said.

“In Victoria, we’ve seen a 21 per cent increase in lending to first-home buyers over the past year and that’s higher than any other state and it’s also much higher than the amount of other loan types.

“Rents are rising very rapidly in Victoria but home prices haven’t really budged, so I think that’s really starting to change the maths for a lot of people.”

Melbourne home prices have increased just 1.1 per cent in the 12 months to April this year and decreased in regional Victoria by 0.9 per cent.

Melbourne And Yarra River Cityscape

Melbourne home prices have increased by 1.1 per cent in the 12 months to April this year.

Expatriate relocation expert Vanna Lim said there was still a lot of competition among tenants searching for good family homes, but she felt overall prices had stabilised.

She claimed tenants could make themselves stick out if they shared more about who they were in their rental application.

“One thing we like to encourage people to do is provide a good cover letter, especially for people who have no Australian rental history,” Ms Lim said.

“It’s rather good to just try and paint a picture of yourself and what you’d be like as a tenant; it can be a little bit more appealing to the agent and the landlord.

“We do think it makes a bit of a difference.”

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