A one-bedroom apartment at 722/555 Flinders St, Melbourne, is advertised at $520 a week, with rents surging across most of the city despite an improving vacancy rate.
Melbourne renters are ditching their landlords in droves with the share of empty homes across the city surging more than 30 per cent in the past year.
New PropTrack figures show the city’s rental vacancy rate climbed to 1.64 per cent in October.
At the same time in 2023 it was just 1.11 per cent.
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Economist Anne Flaherty said with the number of active bonds across Victoria falling by about 22,000 in the past year, the most likely cause for a rental vacancy rate improvement was that tenants were ditching their landlords.
Ms Flaherty said the reduction in demand reflected a growing share of tenants teaming up in share houses, moving back in with their parents or buying a home — rather than face the $40 a week increase in the city’s average rent recorded in the past year.
“The bonds data shows clearly that we have seen a decrease in rental homes,” she said.
“So more people are searching for alternative rental options, and it’s been a very attractive market to buy in.”
PropTrack data shows how vacancy rates are moving around the nation.
The economist noted that there had been a 14 per cent increase in home loans to Victorian first-home buyers in the past year, and said a significant chunk of those numbers would be former tenants.
Council to Homeless Persons chief executive Deborah Di Natale said having vacancy rates below 2 per cent was a “disaster”, and that even with the recent improvement Victoria remained in a “cruel and enduring housing crisis”.
“While there may be some people moving to share houses or back in with parents, what we’re seeing on the ground at homelessness services is surging demand,” Ms Di Natale said.
“Homelessness workers are making heartbreaking decisions to close their doors or are simply unable to answer calls because they don’t have the resources to cope with the sheer volume of people seeking support.”
While there are rental homes available, some like this $1700-a-week, three-bedroom house in 17 Grey St, East Melbourne, are simply beyond the average tenant’s reach.
She added that with working homeless a rising trend, Victoria now needed at least 6000 more social homes to be built each year for the next decade and more robust rental assistance programs — which was in many cases “the only thing standing between entire families being forced to live in cars”.
Even with tenants walking away from rental homes, the vacancy rate for Melbourne still remains 16 per cent lower than it was before the pandemic — and just over half the 3 per cent figure that is generally considered balanced.
Ms Flaherty warned that with Melbourne’s population increasing the fastest of any Australian capital it was not likely to improve.
Some landlords are offering one-month rent free to entice tenants, such as for this apartment at 506/249 Queens Pde, Fitzroy North.
“If you look at the cost of renting compared to other capital cities, it is the second cheapest city to rent in behind only Hobart; so that will be attracting a lot of people from overseas and from other states,” she said.
“So there’s a strong probability that we could see the trend return to declining in terms of the vacancy rate.”
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