The once-deserted Melbourne property market is now in the midst of a rental resurgence with tenants flocking back to the city.
Renters are moving to Melbourne, in hopes of finding more affordable rental properties, amidst soaring rents in the other capital city markets.
This influx comes despite significant rent increases in some suburbs, where prices have surged by up to 40% over the past year.
The Appeal of Melbourne
While Melbourne’s rental prices have risen sharply, particularly in its inner suburbs, the city remains a more affordable option compared to other major Australian capitals. This affordability is increasingly drawing tenants from cities like Sydney and Brisbane, where rental costs have spiralled to unsustainable levels.
For many, the decision to move to Melbourne is driven by the search for lower living expenses. Although rents in areas like Toorak and Werribee South have jumped significantly, the overall cost of living in Melbourne remains lower than in Sydney, Brisbane, and other capitals.
Suburbs Experiencing the Biggest Rent Increases
Several Melbourne suburbs have seen substantial increases in rental prices over the past year, making them less affordable for new and existing residents alike.
Toorak, one of Melbourne’s most prestigious suburbs, has seen a 42.9% increase in median weekly rent, now sitting at $1500. This sharp rise reflects the high demand for housing in one of the city’s most sought-after areas, but it also highlights the growing challenge for tenants seeking affordable options in well-established neighbourhoods. Blue Chip suburbs that are seeing strong rental growth are often a good investment opportunity and something to talk to a Melbourne Buyers Agent about.
Similarly, Werribee South, known for its proximity to the coast and relatively affordable housing, has seen a 33.3% increase in rent, with the median now at $600 per week. This significant rise indicates that even traditionally lower-cost areas are becoming less accessible, driven by the influx of new residents from other states.
Other suburbs experiencing steep increases include Heidelberg West and Beaumaris, where rents have climbed by 28.8% and 26.7%, respectively. These areas, which offer a mix of family-friendly amenities and access to key services, are becoming increasingly popular, contributing to the rising rental costs.
The Impact on Unit Rentals
The surge in rental prices is not limited to houses; unit rentals in Melbourne have also been hit hard. In Ashburton, rents for units have skyrocketed by 37.6%, with the median weekly rent now at $750. This trend is reflective of the growing demand for more affordable living spaces in suburbs that still offer easy access to the city.
Blackburn South has also seen an increase in unit rents, rising by 25.7% to $600 per week. As one of Melbourne’s more established suburbs, Blackburn South offers a mix of residential life and urban convenience, making it a target for renters looking to balance cost and lifestyle.
Keysborough, another suburb seeing a surge in unit rentals, has experienced a 22.5% increase, pushing median weekly rents to $600. The suburbs have a family-friendly environment and good schools, making it an attractive option for families moving from other parts of the country.
Suburban Migration
As more interstate tenants move to Melbourne, they are often choosing to settle in the outer suburbs or even regional areas of Victoria. This shift is partly due to the relative affordability of these areas compared to the inner-city suburbs. However, as demand increases, so too do rental prices, even in these traditionally lower-cost regions.
This migration trend is reshaping Melbourne’s rental landscape. Suburbs that were once considered more affordable are now seeing significant price increases, as they absorb the influx of new residents.
This is leading to a more competitive rental market across the city, with landlords in many areas capitalising on the heightened demand.
However, there is a limit to how much rents can rise before tenants are priced out entirely. In some cases, the pace of rent increases is slowing as tenants reach the upper limits of what they can afford. This has led to some renters adopting strategies to cope with the rising costs, such as sharing accommodations to split expenses.
Rising rents can be challenging for tenants, but it also offers opportunities for renters. Speaking to a Melbourne Buyers Agent is a great way to identify potential opportunities in Melbourne.
