Despite enormous improvements in home loan affordability over recent months renters continue to find market conditions challenging; and the recent global financial meltdown has only exacerbated the problem with many unit and apartment building developments that would have increased supply now being deferred. In the 12 months to December 2008 residential rents in Melbourne rose an average of 10.9 per cent, while regional rents went up 7.4 per cent. This situation of rising rents is unlikely to improve in the short term. It’s been almost four years since the vacancy rate was at levels that the REIV considers balanced. REIV figures show the rental vacancy rates remained around one per cent throughout 2008. At the end of the 2008 calendar year 1.2 per cent, marginally more than the previous month when a rate of 1.1 per cent was recorded. During the December quarter 2008, the proportion of family income needed to meet rental payments in Victoria was 22.6 per cent, slightly down from September 2008 (22.7 per cent) but up from the previous December (21.4 per cent). Australia-wide, that percentage was 25.3. REI V research clearly shows that Melbourne is in the middle of the tightest rental market seen for over 25 years and the lack of vacancies has a direct relationship to the rent that is charged, accordingly it is no surprise that rents have gone up. There will continue to be upwards pressure on rents until such time as the imbalance between supply and demand is addressed, this will only occur when the supply housing in areas of high demand improves.

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Tags: cent, enormous improvements, financial meltdown, home, problem, reiv, rental vacancy, Tenants, vacancy rate, vacancy rates

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