Melbourne’s rental prices have continued to fall in the face of record-level unit vacancy rates and economists warn there is no end in sight.
The city’s investors have felt the pinch of capped international migration and the post-pandemic exodus from the city as people moved interstate for lifestyle and less strict lockdown conditions than those the Victorian capital has experienced.
Melbourne had the highest vacancy rate in the country for both the house and unit markets.
Archistar chief economist Dr Andrew Wilson said most capital cities were experiencing an upswing in rental prices with house vacancy rates below 2 per cent across all other capital cities, except Melbourne with 2.5 per cent.
“Latest data reveals that capital city house vacancy rates, with the exception of Melbourne, remained below 2 per cent,” Wilson said
“Adelaide, Perth, Hobart, Darwin and Canberra are, remarkably, all below 1 per cent—and Brisbane just above.
“Melbourne remains the exception with clearly the highest capital city house vacancy rate – and [it’s] continuing to rise.”
Median weekly rent prices
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Wilson said all capital cities, except Melbourne, had experienced increases in rent prices during the past year. Canberra was the most expensive capital for tenants.
“Unit vacancy rates also remain tight in most capitals with the notable exception of Melbourne and Sydney where record-level inner-city apartment vacancies have resulted in sharply falling rents,” Wilson said.
Wilson said the continued interstate migration and CBD apartment gluts in Sydney and Melbourne had provided rent price relief for local tenants, but warned there was “no relief for landlords in sight”.
According to Australian Bureau of Statistics data, in September last year Victoria recorded its largest quarterly loss to internal migration since 1995.
There was a net loss of 3700 people in the three months to September 2020.
Queensland gained the most migration from Victoria and New South Wales.