Rental Market Overview
Property Rental Market Overview
Melbourne’s rental market has been through a rollercoaster ride in recent years, and the COVID-19 pandemic has only added to the twists and turns. As a landlord in Melbourne, it is essential to keep up with the latest trends and understand the current state of the rental market to make informed decisions.
The Besser+Co Property Management team have put together this overview of the current rental market in Melbourne and what landlords can expect:
Rental prices are rebounding
In the early stages of the pandemic, rental prices in Melbourne took a significant hit due to lockdowns, restrictions, and reduced demand. However, since the easing of restrictions and the reopening of the economy, rental prices have been on the rebound.
According to Domain’s Rental Report for the March quarter of 2023, the median rent for houses in Melbourne increased by 4.3% to $500 per week, while the median rent for units increased by 1.8% to $420 per week. This increase is mainly driven by the high demand for rental properties, particularly in the outer suburbs, where rents are more affordable.
Vacancy rates are low
The vacancy rates in Melbourne have been consistently low since the beginning of 2022, which is good news for landlords. The low vacancy rates indicate high demand for rental properties, which has contributed to the increase in rental prices.
According to SQM Research, the vacancy rate in Melbourne was 1.4% in April 2023, down from 2.0% in the same month last year. This low vacancy rate indicates a tight rental market, which is expected to continue in the short to medium term.
Tenants are looking for more space
The pandemic has changed the way people live and work, and tenants are looking for properties that offer more space and flexibility. This trend is particularly evident in the outer suburbs of Melbourne, where tenants are looking for larger properties with outdoor spaces.
As a landlord, it’s important to consider these changing preferences when advertising your rental property. Highlighting features such as outdoor spaces, home offices, and proximity to parks and amenities can make your property more attractive to potential tenants.
Property maintenance is crucial
With high demand for rental properties, tenants are more likely to look for well-maintained properties. It’s essential to ensure your rental property is in good condition, with regular maintenance and repairs.
Regular property maintenance not only attracts tenants but also helps to retain them. Tenants are more likely to renew their lease if they are satisfied with the condition of the property and the responsiveness of the landlord to maintenance requests
Screening tenants is more important than ever
With the current tight rental market, landlords may be tempted to accept the first tenant who shows interest in their property. However, it’s crucial to screen tenants thoroughly to ensure they meet your rental criteria and can afford to pay the rent.
Screening tenants can help to reduce the risk of defaulting on rent or property damage. Conducting background checks, verifying employment and income, and checking references can provide a more comprehensive picture of the tenant’s financial stability and rental history.
In conclusion, Melbourne’s rental market is experiencing a rebound in rental prices and a tight rental market with low vacancy rates. As a landlord, it’s crucial to keep up with the latest trends and understand the changing preferences of tenants. Maintaining the property, screening tenants thoroughly, and understanding market trends can help landlords navigate the current rental market successfully.
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