Rent prices are on the increase in Melbourne, Victoria in 2015
With rent prices increasing in Melbourne, the rental market has never been tougher for tenants. Melbourne’s rent prices have reached an all-time high in 2015.
According to the Domain Group’s recently released rental report, the median asking rent for houses in Melbourne, Victoria increased to $390 per week, an increase of 2.5 per cent over the March quarter. The report also found that unit rents increased to $365 per week, an increase of 1.4 per cent over the March quarter. These increases are thought to be as a result of strong population growth in Melbourne that has not only been pushing up rent prices but also pushing up real estate prices. The rental increases come despite Melbourne having a unit vacancy rate of 2.8 per cent and a house vacancy rate of 1.9 per cent.
Melbourne is not the only Australian city to be experiencing increasing rent prices in 2015. Sydney is also seeing rents get more expensive, on the back of property capital gains. The median rent in the Sydney in the 2015 March quarter for houses was $520 a week and for units $500 a week.
These increases in rental prices may result in further interest by renter and investors alike in purchasing property in Melbourne, which is already showing good property capital growth.
There is concern for first home buyers due to the increased rents reducing disposable income and making it more difficult to to save a deposit for the purchase of their first home. This comes on top of what is already a difficult market to enter due to higher and rising property prices. It is also expected that the rental price increase will lead to higher demand for low deposit home loans and family assisted first home buying (such as guarantor home loans). However, rental price increases are good news for property investors in Melbourne as increases to rents also help to cover the interest payments on investment properties.
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