Melbourne tenants feeling the squeeze as rents rise to all-time high!

Rising property prices in Melbourne are keeping a growing number of young buyers on the rental roundabout, with record rents making the road to home ownership even longer.

The median asking rent for units increased by $5 a week over the June quarter to an all-time high of $370, according to the Domain Group Rental Market Report released on Thursday.

House rents were steady over the June quarter at $390, but are up 2.6 per cent ($10) on last year.

This data spells bad news for first home buyers, who not only have to put away about an extra $100 to $200 a week for their deposit to keep up with house price growth, but now also have to pay more rent at the same time.

Domain Group senior economist Andrew Wilson said it was evident Melbourne’s building boom hadn’t taken pressure off rents.

And with prices also rising, he said first-timers would need to stay in the queue for longer.

“At the moment it’s … not a first home buyer driven market,” he said.

“Hopefully higher levels of supply will moderate rental increases to make at least a level playing field for those saving for their deposit.

“It would also put some downward pressure to stop the rate of prices growth.”

Across Melbourne, tenants in the inner east were the hardest hit, with the median asking rent for houses climbing 3.8 per cent to $540 a week.

Rental demand in the outer east has also been strong with house rents rising 3.8 per cent over the year to $410 a week.

Despite a record level of unit building approvals in the City of Melbourne, rents in the inner city jumped 2.3 per cent over the period.

Even in South Yarra, where a large volume of apartments are being offered to the market, rents increased by 5 per cent over the year to $420 a week.

Demand for rentals in Melbourne’s western suburbs has resulted in the median unit asking rent increasing by 1.6 per cent to $310 a week, with large jumps seen in suburbs such as Williamstown.

Hockingstuart director Joanne Royston said rental stock in Williamstown had been few and far between.

She said there were only about seven to eight blocks of mainly between 10 and 12 properties available for rent in the area.

“All are usually situated close to the water or close to public transport, so they’re all in really good spots,” she said.

“The demand for those is usually very, very good and [there are] very low vacancy rates whenever we see them come onto the rental market.”

As an alternative to the suburb, Ms Royston said renters could look at neighbouring areas closer to the city but enjoy the same amenities as Williamstown, such as Spotswood and Newport.

Danielle Meester, 23, is paying about $310 a week for a one-bedroom unit in Stevedore Street in Williamstown, where rents have risen 9.4 per cent over the year.

Compared with neighbouring suburbs where rents are cheaper, Ms Meester has found Williamstown to be less competitive for a rental property.

“You’ve got easy access to the city, but you’re not involved in it all the time like living in the east or the northern suburbs where you’re really close to it all,” the veterinary nurse said.

“And it’s close to water as well; I do enjoy going to the beach in the summer so it’s really nice to be able to just walk down.”

 

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