Victorian tenants have been facing evictions as landlords sell up, while costs rise.
Victorian renters are facing the toughest conditions they have in 15 years, with barely half the homes advertised in the second half of 2024 within reach for a typical household.
While PropTrack’s latest Rental Affordability Report has named the state as Australia’s most affordable for tenants when contrasting typical wages with rental costs, it has endured a sharp increase in price pressures on renters.
A typical household was able to afford to rent 75 per cent of homes available across the state in the 2020 and 2021 financial years, without spending more than a quarter of their income on their lease commitments.
RELATED: Victorian government’s rental reforms passed: Two years to come into effect
HIA warning on Aussie tradie numbers as ABS building approvals and big build budgets grow
The shocking thing Aussie buyers are going without to get their own home
For all Victorian rentals advertised over July-December 2024, they could afford 54 per cent.
And for low-income earners in the state, less than 10 per cent of rentals were considered affordable.
They are the worst figures since 2010, when State Library records show petrol cost $1.19 a litre, you could buy a loaf of bread and two litres of milk for about $5, and valuer general stats pegged Melbourne’s median house price at only $456,000.
REA Group senior economist Angus Moore said Melbourne rental prices had softened during the pandemic, when a rental moratorium was imposed, and while they had grown rapidly in the last few years, prices had yet to catch up to the rest of the nation.
“It still remains quite challenging to find a rental, but it has improved a little bit,” Mr Moore said.
However, he said property investor purchases hadn’t increased in Victoria to the same extent as other states, and the state was expected to become less affordable than others in the future.
PropTrack economist Angus Moore said Victorian renters are facing the toughest time for tenants since 2010.
“(They’re) as high as we’ve seen in a couple decades in Western Australia, South Australia, Queensland and the highest since 2017 in New South Wales, and the same is just not true in Victoria,” Mr Moore said.
“At some point Melbourne has to return to being more expensive than Adelaide. So, whether that happens in a year or in 10 is harder to say.”
The hit to tenants’ hip pockets has come alongside significant reductions in the number of homes available for rent as landlords responded to changes in investment property taxation by selling over the past two years.
In the year to September 2024, the Residential Tenancies Bond Authority reported a more than 24,000 drop in active rental bonds, equating to a similar loss of rental homes in the market.
Real Estate Institute of Australia (REIV) Jacob Caine said there were fewer bedrooms and homes available to tenants today than 12 months ago, despite more tenants.
A typical tenants wage is not enough to pay the rent for about half the homes in Melbourne.
“The (government’s) intent has been to make the rental market healthier; the outcome has made it sicker,” he said.
Mr Caine said the slight drop in home prices over the past year attracted more interstate property investors in 2025, and he hoped this could negate some of the rental property losses experienced in 2024.
“However, conditions will still continue to have less homes available than we need for the renting public, which will keep the pressure on renters from an affordability and accessibility perspective,” he said.
Renters and Housing Union Australia (RAHU) secretary Harry Millward said he spoke to members regularly who were facing the prospect of homelessness or were homeless already.
“In this state, we still have people living in cars, going from couch to couch, or sleeping rough,” Mr Millward said.
“I don’t believe anyone with a straight face can call that a healthy housing market.”
He added that no party in the Victorian government was on the side of renters and were only on the side of landlords or those who funded their election campaigns.
“With more and more people renting each year, they can see the writing on the wall, they have to do something,” he said.
“The government must step in to pick up the slack where the private market is failing. We need real and net increases in public housing stock.
“We currently have a monopoly on housing via landlord and property associations, and these need to be given some real competition with the public sector.”
Sign up to the Herald Sun Weekly Real Estate Update. Click here to get the latest Victorian property market news delivered direct to your inbox.
MORE: Anthony Albanese’s foreign buyers ban won’t help housing crisis
Granny pod to replace granny flat in new fix for Aussie housing crisis as back yards shrink
10 surprise markets set to make investors millionaires
sarah.petty@news.com.au
English (US) · 