Melbourne rental vacancy rate drops

22-Apr-2010

The REIV has released its March rental vacancy rates survey showing that vacant rental properties remain difficult to find, with a recorded vacancy rate for Melbourne of 1.5 per cent compared to 1.7 per cent in February.

REIV CEO Enzo Raimondo said that the easiest suburbs in which to find a rental home in Melbourne are within four km of the CBD, where the vacancy rate has now averaged two per cent for the first quarter of 2010.

“A vacancy rate of two per cent is well below what it should be but, in contrast to the past five years, represents an improvement.

“In other parts of the city there was unfortunately little improvement. The vacancy rate in suburbs between four and 10km from the CBD dropped from 1.4 to one per cent, which is the lowest it has been for 12 months.

“Vacancies in the middle suburbs, between 10 and 20km from the CBD, remained stable at 1.7 per cent and had eased slightly in the outer suburbs to 1.7 per cent from 1.6 per cent in February.

“In regional Victoria the vacancy rate remained lower than Melbourne’s for the sixth month in a row. A vacancy rate of 1.1 per cent was recorded.

“Of the larger regional centres, Bendigo recorded a vacancy rate of 0.4 per cent; Geelong and Ballarat both recorded a vacancy rate of 0.8 per cent,” Mr Raimondo concluded.

If you would like to stay below Melbourne’s average with your vacancy rates contact Domain Property Advocates Director Melanie Dennis 03 9853 5599 | md@domainadvocates.com.au | 0416 218 003

Melbourne has seen a number of periods of very strong growth in house prices.

In addition to the last few years, Melbourne has recorded four periods of sustained growth in demand and prices in the past 40 years.

Yearly growth in house prices of over 10 per cent was recorded between 1972–1974, 1984–1985, 1987–1990 and between 1997 and 2002.

The highest growth was recorded in 1973, when the median house price grew from $14,500 to $19,800. This result was nearly repeated the following year, when the median grew from $19,800 to $25,800. Over two years this represented a 78 per cent increase – substantial in anyone’s language.

To put that into perspective: if that were applied over the past two years, the median would have increased from $472,000 to $847,800. Thankfully, this has not happened.

While the last few years have not been as robust as those recorded in the earlier REIV sales data, we are in another period of strong price growth.

They key difference between now and the other periods is that in 2008 the median house price fell by $66,500 or 14 per cent, due to the global financial crisis. That was the most significant reduction since the REIV started recording median prices in 1966.

This means that when assessing current strong price increases, the fact that most of the growth last year was recovering lost ground needs to be taken into account.

If you would like assitance in finding the right property give us a call or visit our website.