Rental vacancy rate below 1% - Renting a home no chance now - The Age (Melbourne)

[DavidMc]

http://www.theage.com.au/news/national/renting-a-home-no-chance-now/2008/03/19/1205602482946.html

MELBOURNE'S rental property drought has hit crisis levels after last month's vacancy rate fell below 1% for the first time on record. Rental accommodation in the central city has almost dwindled to zero.

Figures obtained by The Age reveal that the vacancy rate across Melbourne is 0.9%, a level not seen by the property industry since records began in the early 1980s.

For those wishing to live close to the city the situation is even more dire. The Real Estate Institute of Victoria says that, within four kilometres of the CBD, the vacancy rate dived to 0.5% last month. It was 0.6% in February last year.

"A rental vacancy rate below 1% is unprecedented," said REIV chief executive Enzo Raimondo, "and it increases the urgency for governments to take action to increase public and private investment in rental stock."

The surging demand for rental properties in Melbourne, particularly close to the city, is being fuelled by the state's growing population. About 1500 people are moving to Melbourne each week and experts predict that the city's population will hit 6.2 million by 2020, a decade earlier than forecast earlier. The State Government's Office of Housing has reported that median rents in metropolitan Melbourne rose 12.7% in the year to the September quarter.

The Australian Bureau of Statistics says there are 447,074 rental homes in Melbourne. A 0.9% vacancy rate means about 4020 properties are available to be let.

People scrambling for a home are offering higher rents or using family and social networks to gain a favourable result from landlords.

Real estate agents are reporting being swamped at open-for-inspections in the inner city and surrounding inner suburbs such as South Yarra and Fitzroy.

"We may get as many as 50 people or more coming in for an open for inspection, and from that we can expect to get more than 10 applications for the one property," said Karetta Farmer from Dingle Partners.

 

[mja]

Could someone please put a "Sorry, Melbourne is Closed" sign up as you leave the airport.

 

[sash]

Could someone please put a "Sorry, Melbourne is Closed" sign up as you leave the airport.

This is only the tip of the iceberg......the vacancy rate will tighten even further!

Unless the government lowers immigration...which will cause other inflationary pressures this situation is going to get worse. Also, new building is not coping due to skills shortages and higher interest rates.

Prepare for rents to go up by 10%-15% pa over the next few years.

 

[crc_error]

sash, hence interest rates will go up more!!

people arent building due to the high costs involved.. soon you will be able to rent out the foot path in frount of your house for people to place their box homes!

 

[arowana]

you can put up a quick shipping container house in your backyard and start renting!

 

[crc_error]

lol, thats a pissa!

 

[ethereal]

Here in Mackay, there have been stories in the local news about people actually living in shipping containers due to a rental shortage. Air con would be a must.

Louise

 

[exstatic]

Well thats great news.. I'm glad I have my IP in Melbourne inner city

I think I might have to stock up on a few more!

 

[natedog]

Hi All,
Add to the mix a long waiting period for titled residential land on the fringes of Melbourne and the wait for completed new construction gets even longer!.....we could get back to the days of neutrally or close to neutrally geared IPs in average suburbs one day.......it would be nice
Cheers,

 

[jingo]

Rental Increases

Rents are increasing very rapidly in inner Melbourne at the moment. Just had a quick look on the net, and I am able to increase the rent on one of my IP's by 30%. Seems like I will be able to do it all at once too. If I get a vacancy I won't have to wait too long for another tenant.

I wonder how much higher rents will go by the end of the year?

 

[DavidMc]

Rents are increasing very rapidly in inner Melbourne at the moment. Just had a quick look on the net, and I am able to increase the rent on one of my IP's by 30%. Seems like I will be able to do it all at once too. If I get a vacancy I won't have to wait too long for another tenant.

I wonder how much higher rents will go by the end of the year?

Yes! Now is the time to switch to month to month leases or only sign up for 6 month leases...