The Melbourne suburbs where tenants can find the cheapest rentals
When design agency managing director Sean Smith’s lease was up on his one-bedroom, inner-city apartment, he was ready to sign again for another two years.
But with the COVID-19 pandemic seeing migration and tourism grind to a halt, Melbourne CBD rentals have become plentiful and cheap – leaving Mr Smith to look for more bang for his buck.
“A lot of landlords were willing to drop their prices quite a lot from what they were getting in the previous years,” Mr Smith said.
Melbourne CBD rental prices have plummeted in the year to September, with the median unit rent dropping 17.4 per cent to $450 per week – the largest fall of any Melbourne suburb – according to the Domain Rent Report released on Thursday.
Docklands and Southbank unit rents also saw significant falls of more than 14 per cent to $490 and $480 per week respectively.
Mr Smith found a three-bedroom, two-bathroom apartment with a car park on Little Collins Street and moved in last month on a two-year lease. His new pad sets him back $530 a week – just $5 more than what he was paying for his Bourke Street one-bedder.
Add in the $220 a month he used to pay for a car park, and Mr Smith is saving roughly $50 a week.
“It’s a good time to get in, I’m not sure how long these kind of deals will be around,” he said.
Melbourne’s inner area, including the CBD and suburbs such as Fitzroy, St Kilda and Parkville, accounted for 64 per cent of all unit rental listings in the September quarter, Domain senior research analyst Dr Nicola Powell said.
She said this meant Melbourne’s overall rental price for units, which saw a quarterly fall of 3.6 per cent to $400 per week, was largely affected by price-falls in the city and surrounds.
“The CBD has a high proportion of renters and units, and investors tend to be drawn to the unit market,” Dr Powell said.
She said the lack of international migration, overseas students and the halted demand for holiday rentals all contributed to lower asking rents in the CBD.
“It is really grim, the life in the CBD is not there any more,” he said. “There are some complexes with 120 apartments vacant – that’s not just one building, that’s multiple buildings.”
He said most owners were “fighting” to reduce rents, and fewer and fewer inquiries meant many were slashing prices.
“Owners are getting really desperate,” he said. “They would prefer to get someone in rather than have the property empty.”
Harcourts Melbourne City director Dionne Wilson said the stage four lockdown had seen rental inquiry completely dry up, but in recent weeks some substantial price reductions had “very slightly lifted rental inquiry”.
“But it’s not like the floodgates have opened,” Ms Wilson said.
Dr Powell said house rents held up better, increasing overall by 2.3 per cent for the quarter to $440 per week, but there were still some suburbs which saw price falls of up to 12.5 per cent for the year – including Werribee South, Oakleigh East and Yallambie.
Sorrento saw the largest house rent gains – 18.2 per cent for the year to $650 per week. Other Mornington Peninsula suburbs, including Mount Eliza, Somerville and Bittern, had median rent increases of up to 9.5 per cent.
“We’d be like this anyway at this time of year, but this has just fuelled the already high demand for summer,” Ms Jensen said.
Inner-south suburbs, including Hughesdale, Aspendale and Brighton, also saw rises in median rents for houses with Brighton’s median tipping over to four figures at $1050 per week.
Ref: JEMIMAH CLEGG, REPORTER (on 17 Oct 2020). The Melbourne suburbs where tenants can find the cheapest rentals. Retrieved from https://www.domain.com.au/news/the-melbourne-suburbs-where-tenants-can-find-the-cheapest-rentals-996128/.
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