/// RENTAL MARKET
BELLER PROPERTY GROUP
Metro Melbourne Rental Snap Shot
As 2017 approaches the end of its third quarter and as the weather starts to heat up, Leasing Agents and Property Managers prepare for an influx of activity within the metro Melbourne rental market. Spring is a popular time of year for Tenants seeking new rental properties. Spring is viewed as the perfect time to get a rental property, just before the Christmas season and the New Year period hit. The surge in the rental market normally lasts till late October/early November and then slightly drops off within December, before resurging again in mid January. It is forecast that the second half of 2017 and start of 2018 will be no different.
Current vacancy rates, as per the Residential Estate Institute of Victoria (REIV) have held at 2.2% for metro Melbourne within the July-September period. A 2.2% vacancy rate is a good indication that the supply and demand of the rental market are in sync and performing well, for both Tenants and Landlords. Some capital cities around Australia are experiencing vacancy rates of 3.0%+ and this suggests there is an oversupply of property, in comparison to the supply of Tenants looking for properties to lease. The metro Melbourne market holds supply and demand very well and this is further supported by the 2.2% vacancy rate, which has not varied from the (approx) 2.1%-2.7% range throughout 2017.
Throughout the first three quarters of 2017, rental yields have been positioned between 3.7% – 5.4% (as per statistics from realestate.com.au), showing strength in the returns some Investors are receiving on their property investments within the metro Melbourne region. Rental yields are direct indicators for the strength of rental markets, as this demonstrates how the rents are performing in those specific areas. At Beller Property Group, it has been noted that rents have been on the slight increase over the last quarter, within metro areas of Melbourne. In September 2014 and towards the start of 2015 it was noted that rents slightly dropped in these metro areas, however, have come back to remain solid and consistent. Not since early 2015 has there been a noticeable and direct trend in rents taking a backwards step in the Melbourne metro rental market.
The metro rental market is referred to as a ‘market within markets’, which should not be defined by the broad brush statistics of the overall Melbourne rental market, as a whole. Metro areas have experienced higher demands amongst a wider group of demographics which assist the vacancy rate of 2.2%. Metro areas have a greater appeal to the rental market. Core demographics that seek metro living include professional couples, professional singles, professional share housemates, University students, downsizers, young families and these demographics are normally aged between 21-39 years old (the most common age bracket for the metro area).
As per realestate.com.au the average hit per rental property listing within metro Melbourne on the internet (data taken 11th September 2017) is between 363-440 visits/clicks per property listing. This figure is rather surprising as it is substantially less than the figures provided from the outer suburbs of Melbourne, which average between 600-1,100 visits clicks per property listing.
It is predicted that the last quarter of 2017 will be a strong end to a reasonably strong year for the Melbourne metro rental market and 2018 will have the basis for another strong year ahead.
Head of Business Development and Leasing
P 03 9510 1966