Biggest drop in Melbourne rental prices on record: ABS

Jul 30 No Comments

Biggest drop in Melbourne rental prices on record: ABS

Author:ahsan

Categories:realestate

Inner city suburbs have seen an explosion of new rental listings.

Some tenants could benefit after Melbourne recorded its biggest quarterly drop in rent prices on record.

But there’s little silver lining for renters working in coronavirus impacted industries, advocates say.

Rent across the city slumped 1.1 per cent in the June-ending quarter, the Australian Bureau of Statistics found.

It marked the biggest decline since ABS started recording the metric in 1972.

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Another research firm, CoreLogic, reported a 0.6 per cent fall in Melbourne’s median rent for the month of June.

The city’s average rent was $453 across all dwellings, according to CoreLogic data.

But despite these figures appearing to signal improved affordability for renters, Victoria’s peak tenant advocacy body warned they formed part of a “more complex picture”.

“Renters in the private rental market are over-represented in vulnerable industries, such as hospitality and retail,” Tenants Victoria chief executive Jennifer Beveridge said.

“Renters tell us they have lost their jobs or have fewer hours due to the impact of coronavirus. They tell us they struggle to meet rent payments.

“Some have moved in with family and friends, but we know not everyone has that fallback option.”

CoreLogic head of research Eliza Owen said job losses in hospitality, tourism and the arts had contributed to rental price drops, by reducing demand for properties.

Madeline Byrne rents with Vinny an Italian Greyhound in her household. Picture: Sarah Matray

Signage for a rental in Carlton North. Picture: AAP Image/James Ross

“Households in these sectors are more likely to rent than in other industries,” Ms Owen said.

Realestate.com.au director of economic research Cameron Kusher said the price fall was a “clear indicator” of the profound impact the pandemic was having on the property market.

“We have virtually no migration, there is new stimulus encouraging purchasing from first-home buyers who otherwise may have been renters, and then there’s the fact unemployment is rising and younger people are most affected,” Mr Kusher said.

He added the moratorium on rental evictions, in place until September, meant it was unlikely the next quarter’s results would see another sharp drop.

But after that, it was “likely rental rates will fall further”.

“It will take quite some time to recover to previous highs,” he said.

Philip Webb chief executive Anthony Webb said a number of tenants had vacated properties to take advantage of record-low interest rates and stimulus packages to purchase a home.

He added landlords had been forced to make concessions to keep their properties tenanted.

“There’s been a fear for landlords that if they don’t adjust their rents or accept applicants that come through, (their property) might sit vacant for a while,” he said.