Changing Vacancy Rates

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Rental Vacancy rates still low.

Feels like the same old thing week after week.
Good properties in good locations are still getting plenty of interest.
Family homes are very sought after in great locations, with close proximity to good schools and transport the most common requests.
With the interest rates likely to drop again in August, future investors will come back to the market. We have seen a large increase of owner occupiers moving back into the property market and with this we should see more turnover which will hopefully bring more rental properties on to the market to help a little with the housing shortage..

Vacancy rates have been reported for Melbourne by the REIV.

Rental market snapshot – June 2012
The current rental vacancy rate in Melbourne is 1.8 per cent
The current rental vacancy rate for Regional Victoria is 2.7 per cent (Source REIV).

New Lettings Mar 2012.

The number of new lettings provides an indicator of the overall availability of rental housing for a specific period. A new letting can result from two main sources: turnover in existing rental housing or new additions to the stock of rental housing.

Table 5 shows the total number of new rental lettings for the March quarter 2012. Metropolitan Melbourne accounted for 80 per cent of all new lettings in Victoria. Across the state the total number of new lettings was 53,425, an increase of 9.5 per cent on the same quarter of 2011. Metropolitan Melbourne recorded an increase of 11.4 per cent in new lettings and regional Victoria an increase of 2.7 per cent on the same quarter of last year.

Table 6 lists the total number of new lettings across each of the 14 statistical regions. All nine metropolitan regions recorded increases in the number of new lettings on the same quarter of 2011 ranging from 4.8 per cent in Inner Eastern Melbourne region to 22.9 per cent in North Eastern region.

In regional Victoria, four of the five regions had increases in new lettings since the March quarter of 2011 ranging from an increase of 2.1 per cent in the Central Highlands-Wimmera region to an increase of 5.3 per cent in the Barwon-South West region. Loddon-Mallee had no change in new lettings.

Table 5: Overall new lettings for Melbourne, regional Victoria and Victoria

Region Mar-12 Mar-11 Change
Metropolitan Melbourne 42,493 38,147 11.4%
Regional Victoria 10,932 10,648 2.7%
Victoria 53,425 48,795 9.5%

Table 6: New lettings for statistical regions Victoria

Region Mar-12 Mar-11 Change
Metropolitan Melbourne
Inner Melbourne 11,707 10,823 8.2%
Inner Eastern Melbourne 5,676 5,414 4.8%
Southern Melbourne 3,807 3,524 8.0%
Western Melbourne 5,797 5,072 14.3%
North Western Melbourne 3,954 3,314 19.3%
North Eastern Melbourne 4,272 3,476 22.9%
Outer Eastern Melbourne 1,941 1,797 8.0%
South Eastern Melbourne 3,238 2,853 13.5%
Mornington Peninsula 2,101 1,874 12.1%
Regional Victoria
Barwon-South West 3,065 2,911 5.3%
Gippsland 2,047 2,002 2.2%
Goulburn-Ovens-Murray 2,184 2,134 2.3%
Loddon-Mallee 1,925 1,925 0.0%
Central Highlands-Wimmera 1,711 1,676 2.1%

(Source – Department of Human services Rental Report Mar 12)

This outlines statistical data and trends from March 2012 to previous years.
What this shows is each year we require more and more rental properties,
Therefor if investors are dubious about the property market or as some have had – there financial situation has been harshly lessened due to the stock market or for our overseas investors, the change in the Australian dollar, we could see Melbourne in desperate need of housing for the people who can’t afford to get into the property market,
With a vacancy rate as low as it is now, this can only get worse, if numbers of properties for rent does not increase in the future, we will see the past trait of prospective tenants offering more money for the property than asking price to secure the lease.
Sometimes this will ring alarm bells and good property managers will ensure all checks are done prior to thinking about the extra rent. However prospective tenants are trying to give themselves an advantage over the next person, when they now multiple applications are happening.
This has started to happen and I can see this continuing for good family properties.
We may also see rents increase due to supply vs demand…
This occurs with all real estate; we are noticing how the price of good properties for sale is still and have consistently sold for good prices.
While average properties or poorly presented properties will not appeal to all.

Sam James.

Information below reported by real estate business – Survey conducted by
A recent survey done via real has discussed how many prospective tenants are opting for shorter leases.
This was a survey conducted asking approx. 3500 people.

Renters upgrading more often: survey
Thursday, 26 July 2012

Staff Reporter

Renters are increasingly looking to upgrade to a nicer property in a better suburb and are signing shorter-term leases to help keep their rental options open, according to a survey by owner, REA Group.

The survey showed that despite a tight rental market and the arduous task of moving to a new rental property, more renters are actively monitoring the rental market, with 64 per cent saying they plan to rent a property to live in within the next twelve months.

Henry Ruiz, REA Group’s chief product officer, said renting suits people for different reasons, particularly if they are young professionals searching for a particular lifestyle.

“Compared to the cost of buying property, renting sometimes allows people to live in a nicer home in a better suburb, and they can move again if a better home becomes available,” he said.

“It’s this flexibility and freedom of being able to ‘trade up’ in rental properties that appeals to this aspirational group of people,” he said.

The survey of renters and sharers also found that once a rental property is found Australians like to keep their options open, with 64 per cent taking a lease for less than 12 months, and approximately three out of four respondents leasing a property for two years or less.

Other trends to emerge from the survey included the popularity of Melbourne’s inner suburbs, with five of the ten most popular rental suburbs located in the city’s inner city core including Richmond, South Yarra, St Kilda and Brunswick, while 29 per cent of the nation’s renters have no lease at all.

Additionally, data from online rental application service 1Form found shift workers in the healthcare, hospitality and retail sectors are the most frequent applicants for rental properties.

The Consumer Insights Survey, Rent/Share, was conducted on in January 2012 with 3,132 respondents taking part, REA Group said.

(Funnily enough several of our prospective tenants have been asking for longer leases, and asking to have the rent frozen for 2 yrs.)

This is due to the shortage of good rentals and when a good property comes up, they are competing with multiple applications.

If you are have an investment property and would like further info about our property management services – done hesitate to call or email 03 9523 1054.

If you would like experienced assistance to buy your family home or investment property call us on 9523 1054.

Sam James

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About the author

Sam is married with 2 adult children. Her main role and skills lie in finding the property that others seem unable to find. She also enjoys the cut and thrust of auction bidding and her negotiation skills present the company with a number of options not involving the male ego. Sam's main non-work activities revolve around her family & friends.