Melbourne no longer Australia cheapest rental market: A compelling case for buying off the plan
The current rental market crisis is already pushing enquiry numbers through the roof from both first home buyers and investors who are seeking to either get out of the rental market, or take advantage of it.
The latest statistics from property data analytics firm CoreLogic show just how strong the rental market is, particularly in Melbourne.
Their Quarterly Rental Review Q2 2023 found Melbourne is now no longer the most affordable capital city to rent a house, following 3.5 per cent quarterly growth in the rental market.
Dwelling rents in Melbourne (both houses and units), rose 3.9 per cent in the quarter, significantly outpacing growth in Perth (3.4 per cent) and Sydney (3.2 per cent).
The rise is putting pressure on renters who are now starting to look at entry-level apartments, particularly in Melbourne's inner-ring, rather than be beholden to the rent rises, while the growth has investors looking at securing stronger rental yields than they've likely ever seen before.
Where gross rental yields have started to fall across Sydney, Brisbane, Adelaide, Hobart and Canberra, they rose in Melbourne, Perth and Darwin. Another case for investors is the critically low vacancy rate, 0.8 per cent, one of the lowest capital city vacancy rates across the country.
Specifically looking at units, which incorporates both apartments and townhouses, Melbourne rents are up 4.5 per cent on the quarter to June, the second highest quarterly gain behind Perth.
Melbourne's median rent for units is now $532, and houses $567.
Sydney, Melbourne and Perth have also seen total rental supply between -30 per cent and -50 per cent below the previous five-year average for this time of year.
Rental listings remain well below the previous five-year average, with a national shortfall of around -32.4 per cent, or 47,500 rental listings recorded over the four weeks to June 3rd.
"Strong demand from overseas migrants, particularly international students, continues to support stronger growth in the medium to high-density sector, with national unit rents increasing by 3.6 per cent in the June quarter compared to a two per cent increase in house rents," CoreLogic Economist and report author Kaytlin Ezzy noted.
The report found Brighton was the most expensive suburb in Melbourne to rent a house. The median rent in the Bayside hotspot is $1,343 a week, and the median house value $3,536,000.
The majority of Melbourne's most expensive suburbs to rent a house are in the inner ring. Black Rock, Middle Park, Malvern and Canterbury made up the top five. The top 24 suburbs have median house rents at over $1,000 a week.