Melbourne experienced a major rental crisis in recent years. There has been a shortage of rental properties, especially in the suburbs. Due to this, the prices of rental properties have skyrocketed, and it has become difficult to locate a reasonably-priced property in your desired location.
Even if you land one, there’s a high chance you’ll be competing with other applicants for the same property–the property owner will obviously trust the most financially reliable applicant. At this point, we understand if you’re looking for real estate for rent in Sydney instead.
In this guide, we’ll explore the reasons why it is hard to rent a property in Melbourne, and what you can do to find one more easily.
Why Is It Difficult to Rent a House in Melbourne?
In an ideal case, the process of renting a house in Melbourne looks something like this:
- Choose your favourite residential area in Melbourne
- Search for vacant rental properties within this area on a real estate listing site, like Soho, or with the help of a real estate agent.
- Shortlist vacant properties that fall within your budget and fulfill your needs
- Inspect the property in person
- Fill out a rental application
- Move into the new house when the application is approved
When you set out to implement this process in real life, steps two and three can take weeks, as the rental market has grown to be competitive, especially if you’re looking for apartments for rent in Melbourne CBD. This is because:
- There are over 2900 real estate agencies operating in Melbourne
- The average agent commission ranges from 1.6% to 3.5%.
- As of November 2023, the average rental vacancy rate in Melbourne is about 1.2% which is lower than the 1.9% in March 2022.
- Melbourne rents increased by 2.2% in June 2022.
The Melbourne Rental Market in 2023
Melbourne’s rental market is currently quite competitive, with a vacancy rate of just 1.2%. This means that there is a high demand for rental properties and competition between renters is fierce.
However, there are a number of things you can do to increase your chances of securing a rental property in Melbourne.
Ideal Rental Vacancy Rates
The ideal rental vacancy rate for Melbourne is between 2.5% and 3.5%. This means that there should be between 2.5 and 3.5 vacant properties for every 100 rental properties. A vacancy rate below 2.5% indicates a tight rental market, while a vacancy rate above 3.5% suggests a more relaxed market.
Tips to Make Hunting for a Rental House in Melbourne Easier
It may be difficult to find and rent a house in Melbourne, but does that mean you can’t do a thing about it? Absolutely not. Here are three tips that can help you more easily navigate the process:
1. Locate Your Dream House Online
Instead of manually searching for a perfect house to rent or entrusting a real estate agent with the job, we recommend looking online through a reliable platform like Soho–this saves time, money, and effort.
Soho lists a wide array of vacant properties in different areas of Melbourne and allows you to set filters and shortlist options while you search for a vacant property that syncs with your needs and budget.
In this way, you don’t have to pay a tip to the real estate agent, and you can browse all your potential options without biased opinions from agents.
2. Don’t Stick To One Real Estate Agent
A real estate agent assists you in exchange for a commission or free. Naturally, they’ll push you to finalise deals that bring them a good profit. Sometimes, these real estate agents might show you only those properties that benefit them more than the others.
So, if you’re not searching for a house in Melbourne online, we urge you to consult at least two or three real estate agents.
3. Keep Your Documents Compiled and Ready
Step five of the renting process is filling out a rental application. This is a challenging process–you need to have multiple methods of ID, provide a bank statement proving your income, and offer all other documents necessary, such as references.
If you’re a resident who has lived in Australian rental properties for the last two to three years, the documentation process will be easy for you. However, if you’re a student, job seeker, expat, or someone with no rental history, the process can be difficult and time consuming.
In this case, we recommend determining the documents you’ll need for a rental application ahead of time and keeping them compiled right from the beginning of your property hunt.
Looking for more information on lease transfers and sublettings in Melbourne? We’ve got you covered–check out our recent article.
Is There a Rental Crisis in Melbourne?
The rental landscape in Melbourne has reached a critical juncture, with a significant portion of renters facing unprecedented challenges. Community legal centers, which are the first line of defense for many facing evictions, rental disputes, and repair issues, are reporting a dire situation.
They are unable to meet the needs of up to two-thirds of those seeking assistance, signaling a deepening housing and cost-of-living crisis in Victoria.
Recent data indicates that the Department of Families, Fairness and Housing has fallen short of its goal to assist 10,000 low-income Victorians with bonds for the private rental market by a staggering 30% in the year leading up to July. This shortfall represents approximately 3,000 individuals who are left without crucial support in securing rental housing.
The surge in demand for rental assistance is further underscored by the more than 5,400 requests to Consumer Affairs Victoria for rent increase reviews in the last financial year—a 120% increase from the previous year. This spike in requests is a clear indicator of the growing financial strain on renters.
Is Melbourne city a tough rental market?
Yes, Melbourne city is currently experiencing a tough rental market. The vacancy rate is very low, at just 1.2%, which means there is a high demand for rental properties and competition between renters is fierce. Rents are also high, and they have been rising steadily in recent years.
Here are some of the factors that are contributing to the tough rental market in Melbourne:
- Strong population growth: Melbourne’s population is growing at a faster rate than the national average, which is putting pressure on the housing market.
- Reduced supply of rental properties: There has been a decrease in the number of rental properties available in Melbourne in recent years, due to factors such as investors converting rental properties to short-term accommodation.
- Increased demand for rental properties: There is a high demand for rental properties in Melbourne, particularly from international students and young professionals.
Why is renting so hard in Melbourne?
Renting is so hard in Melbourne because of the low vacancy rates. Melbourne rental listings have fallen to a decade low while median rents have soared to a record high.
This means that there are fewer rental properties available, but those that are available are more expensive. This is making it harder for people to find affordable rental accommodation in Melbourne.
How competitive is the Melbourne rental market?
The Melbourne rental market is very competitive. The vacancy rate is very low, at just 1.2%, which means there is a high demand for rental properties and competition between renters is fierce. Rents are also high, and they have been rising steadily in recent years.
How to rent a house in Melbourne for the first time:
- Do your research: Before you start looking for a rental property, it is important to do your research and understand the rental market in Melbourne. This includes understanding the average rent for different types of properties in different suburbs, as well as the vacancy rate.
- Get your finances in order: You will need to provide proof of income and identification when you apply for a rental property. You should also have a budget in mind for how much you can afford to spend on rent.
- Find a reputable real estate agent: There are many real estate agents in Melbourne, so it is important to find one that is reputable and has a good track record. You can ask for recommendations from friends or family, or you can search online.
- Be prepared to act quickly: Once you find a property you like, be prepared to submit your application as soon as possible. Rents are currently high in Melbourne, so properties are often snapped up quickly.
- Be flexible: You may not be able to find your dream rental property straight away, so be prepared to be flexible with your search criteria.