Melbourne’s median rent for all residences including houses, units and apartments, has risen to $600 a week, a new report from Realestate.com.au shows. Picture: Jake Nowakowski.
Melbourne’s rents are rising the fastest in Australia as state and federal government reforms hit the tenants they are supposed to help.
Realestate.com.au’s latest data shows Victoria’s capital copped a more than $20 (3.5 per cent) hike in typical weekly rents to reach $600 during the June quarter.
It works out to an extra $1040 a year.
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Industry experts have warned that after recent Albanese government changes to negative gearing and capital gains tax benefits for investors, as well as a growing list of state government rental reforms and even rising interest rates could all lead to further price hikes for tenants.
Along with Perth, Melbourne’s percentage increase was the largest out of Australia’s capital cities, and there are expectations rents will continue rising in the coming months.
The Market Insight report warned the full impact of the Albanese government’s capital gains tax (CGT) and negative gearing changes have yet to be seen.
REA.com.au economist Luc Redman said Melbourne’s relatively flat growth in property prices since the Covid pandemic, when median weekly rent sat at about $400 in 2022, had made the city attractive to investors.
The Victorian government has introduced more than 150 rental reforms, aimed at boosting renters’ rights, since 2021. Picture: Jake Nowakowski.
Prime Minister Anthony Albanese’s government announced changes to capital gains tax and negative gearing in the 2026 federal budget, during May. Picture: NewsWire/John Gass.
But the federal government’s modifications to investor tax settings caused a recent market “shock” when combined with interest rate rises, he noted.
“Given these tax changes, it is a little bit too early to tell at least from the data what the implications are – and there is still that uncertainty in the market,” Mr Redman said.
Under the government’s reforms, the 50 per cent CGT discount for investment properties was replaced by indexation and a minimum 30 per cent tax rate. Negative gearing for residential properties has been restricted to new builds.
REA.com.au economist Luc Redman says Melbourne’s median $600 unit rent, compared to $590 for houses, indicates that many renters opt for an inner-city location rather than a larger property.
Mr Redman also says that Melbourne’s rental vacancy rate is sitting at 1.69 per cent.
Property Investors Council of Australia chair Ben Kingsley said while higher interest rates were a factor, the cost of updating properties to meet the Victorian government’s revamped legislation and heightened land taxes were significant contributors.
“If you also then put this in concert with the changes to capital gains tax and negative gearing, we’re going to see further shocks in regards to rental supply in a negative way and that’s going to also increase rents,” Mr Kingsley said.
“It’s the perfect storm for renters in respect of less supply, high demand and high costs, and so tenants are absolutely going to be paying significantly higher rents in the state of Victoria over the foreseeable future.”
He pointed out that if landlords would not be getting as much of a tax benefit from their investment properties, they would look to raise rents to cover the loss.
Property Investors Council of Australia chair Ben Kingsley says rents are likely to continue rising into the future.
Rental advocate Jordan van den Lamb, who will stand for the Victorian Socialists in November’s state election, said May’s federal budget “offered absolutely nothing to renters” despite the rising cost of living.
“Property investors on the other hand have grown accustomed to the cash boost they receive through negative gearing and the capital gains tax discount, and it wouldn’t surprise me if landlords raised rents to cushion them from the impact of the changes – even though existing investors aren’t impacted,” the S — t Rentals Australia website founder said.
Rental advocate Jordan van den Lamb says Victoria’s public housing supply needs to be increased, and is also advocating for rent cuts and better enforcement of minimum standards for rentals.
He has seen social media threads indicating investors were planning to raise rents as a protest over the changes.
Mr van den Lamb said he believed this would be a relatively small factor in Melbourne’s raised median rent.
“The actual reasons behind rent increases are greed, the profit motive, developers withholding stock from the market to artificially keep house prices high, landlords keeping homes empty to do the same thing, the demolition of every single public housing tower in Victoria,” he said.
He called for an overhaul of the state’s housing system, given there were enough homes in Victoria for every single resident to have a roof over their head.
Tenants Victoria chief executive Jennifer Beveridge says there’s a human cost to rent rises, as people are forced out of the suburbs they know and love.
Tenants Victoria chief executive Jennifer Beveridge described the 3.5 per cent escalation in median rents as “another blow to Victorian renters”.
“We hear from tenants every single day who are being priced out of the neighbourhoods they call home as a result of increasing rents and tight supply,” Ms Beveridge added.
“This is the real human cost of these relentless price hikes – being forced further away from jobs, schools and support networks.”
Across Australia’s capital cities, median weekly advertised rents were up a combined 2.2 per cent across the June 2026 quarter.
She advised rents worried about unfair rent rises to remember there were protections in place against excessive rent increases.
“A rent increase must be justified by local market rates, the property’s actual condition, and broader economic indicators like the Consumer Price Index,” she said.
Melbourne’s typical house rent hit $590 and units $600, but across all dwellings including both houses and units the figure was $600.
Regional Victorian houses reached $520 and units $420, with a combined rental outcome for both types reflecting an about $5 (1 per cent) increase to $500 a week.
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