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Melbourne tenants have been dealt another financial blow as house rents have soared to a record-high median of $470 a week, while unit rents are on course to reach a record before the end of the year.
Since June, house rents have jumped by $10 a week, or 2.2 per cent, the Domain Rent Report for the September quarter, released on Thursday, shows. It’s a 9.3 per cent rise over 12 months.
Unit rents are now a median $425 a week after jumping by $15 a week over the past three months. They are just $5 below the high mark they reached before the pandemic struck in 2020.
The rising cost of rent is adding to pressure on tenants feeling the pain of higher food, medical care and petrol prices, and one tenant advocate has warned some are skipping meals to make ends meet.
Victorians have called housing affordability one of the big issues in the November state election.
“I’d really like to see living conditions for local people improve, and more affordable housing options made available,” Broadmeadows resident Melanie Radatti told The Age as part of our Victoria’s Agenda project.
Domain chief of research and economics Dr Nicola Powell said it was the fourth quarter in a row that Melbourne’s house rents had broken a record.
“But I think what we’ve seen this quarter is that the pace of quarterly growth has lost momentum,” she said.
“Rents aren’t rising by greater rates than before, and though it’s bleak for tenants, we haven’t seen the growth rate accelerate.”
Rents are rising because of competition from returning tenants moving out of their family homes or arriving in Melbourne from overseas or interstate, coinciding with a drop in the number of available rental properties, down by 61 per cent since last year.
The biggest jump in weekly rents for units was in the inner east, up 4.9 per cent, or $20 a week, to a median $430.
Inner Melbourne’s unit rents were up 3.4 per cent over the quarter, and 22.7 per cent over the year, to $460 a week. That equates to a jump of $85 a week since last September.
Jason Tse and his wife Taru Chung have been searching for a new home after their landlord tried to increase the rent on their Docklands apartment by 30 per cent.
Tse negotiated the increase down to 25 per cent on a short, six-month lease.
Jason Tse and Taru Chung are hoping to find a more affordable rental in Footscray.Credit:Jason South
Over the past three weeks, he has filled in about five applications and inspected 20 properties within a 10-kilometre radius of his Docklands apartment, including in Carlton, Southbank and South Melbourne, without success.
The couple are now searching for a two-bedroom home further out of the city, in Footscray.
Both work full-time in a Port Melbourne warehouse for an apparel company, and have a budget of $550 per week.
“I’m frustrated because I think with our budget, it should not be hard to get a place,” Tse said.
Even in the outer suburbs, tenants are struggling. In the south-east, weekly house rents are up by $45 a week compared with a year ago, and they are up $30 in the west.
Tenants Victoria director of community engagement Farah Farouque said low- and middle-income earners that had normally moved to the outskirts of Melbourne to rent were now finding it difficult to survive.
“It’s proving very challenging,” she said. “The suburbs which were once famously affordable, like Frankston, are no longer affordable because of the extra competition.
“Single parents feature in this narrative, but also people in work. Renters who are holding down jobs are finding it hard to secure a property. We’ve [also] been hearing anecdotally that some people are going without meals to be able to pay the rent.”
Rents in outer suburbs once considered affordable, such as Frankston, are no longer an option for some renters.Credit:Simon Schluter
Farouque said 90 per cent of Victorian renters were forced into the private market because there is not enough social or affordable housing available for those most in need.
Real Estate Institute of Victoria chief executive Quentin Kilian agreed more social and affordable housing was needed.
He said Victoria’s new rental laws, introduced last year to provide minimum standards for properties, had caused investors to sell. “The biggest pressure is the number of landlords moving out of the rental market and selling their investments,” Kilian said.
Rising interest rates and the increased cost of repairs as building material prices continue to rise were also taking a toll on the rental market, he said.
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