Victorian government statistics compiled from tenancy bond data shows that, as at December last year, the median rent across Melbourne was $315 a week, up 10.% on a year earlier.
Rent Surge |
| Melbourne (Region) | Year change to Dec 2008 (%) |
Inner | 10.0 |
Inner east | 9.4 |
Southern | 12.9 |
Western | 15.2 |
North-west | 13.2 |
North-east | 11.1 |
Outer east | 11.5 |
South-east | 12.2 |
Mornington | 10.6 |
| Source: Housing Victoria |
The detailed data obtained by The Australian Financial Review shows the greatest increases occurred in the middle-ring suburbs to the west (15.2%), north-west (13.2%) and south (12.9%).
Absolute rents were still highest in inner and inner eastern Melbourne ($385 and $350 a week, respectively).
Even in Victoria's regional areas, the median rent increased by 7.4% to $210 a week.
The greatest demand appears to be for two-bedroom houses (up 12.2%) and one-bedroom apartments (12.2%).
Housing Minister Richard Wynne said the data underlined the importance of federal and state government initiatives to increase the supply of housing.
"Increasing supply is the most effective way of reducing upward pressure on rents," he said.
Mr Wynne said while the average rent increases were still high, the rate of increase was showing signs of easing.
"The data shows these rises have fallen slightly from their peak of 13% in metropolitan areas in the year to June 2008," he said.
"This is why we will be looking very closely at projects submitted to us to build new public and affordable housing in regional Victoria using the stimulus package funding.
His argument seems to be backed by a decline in the median rents for three-bedroom flats (down 1.2%) and four-bedroom homes (down 0.2%) over the December quarter.
LandMark White national research director Vanessa Rader said the rising rents combined with lower interest rates had created a much stronger yield position for investors.
"Now is a really good time to purchase," she said. "Rental growth is still strong so it is a good time to buy ... you will get a good yield so you can sit it out and ride the next wave of capital growth."
First-home buyer incentives could also result in former prospective tenants becoming competitors for housing stock, but this effect would be limited in the wider market, she said.
The Real Estate Institute of Victoria's chief executive, Enzo Raimondo, said the rental market's vacany rate had been below the accepted equilibrium point of 3% for four years.
"There is really only one solution to this problem - we need more homes built in places where people want to live," he said.
Source: The Australian Financial Review
Date: Friday, 27 March 2009
Author: Mathew Dunckly and Scott Elliott
