Melbourne’s rental vacancy rate has more than doubled since this time last year, while Sydney’s figure has also blown out.
Some 4 per cent of rentals were vacant in Melbourne in September, well up from 1.8 per cent 12 months ago. The figure also worsened during the city’s strict stage four lockdown, from 3.9 per cent in August.
Tenants who lost work during the COVID-19-related recession have been moving out of rental properties and in with family and friends, while international students have not been able to come to Australia. But rental markets in other capital cities were returning to normal as they keep the virus at bay.
Domain senior research analyst Nicola Powell said Melbourne’s vacancy rate was the highest on Domain’s records.
“It shows the rental market in Melbourne is extremely disrupted,” she said. “It doesn’t come as a surprise really that Melbourne is forging a path on its own compared to other cities.
“While other cities are emerging from a lockdown, Melbourne was in stage four.”
The high rates were concentrated in the inner city, Dr Powell said, and other suburbs of Melbourne had actually benefited from the pandemic.
The highest vacancy rate, at 13.1 per cent, is in the Melbourne city SA3 area. But tenants face slim pickings in Cardinia in the outer south-east, at 0.4 per cent, and the beachside Mornington Peninsula at 0.5 per cent.
“We have a CBD that is struggling,” she said. “The CBD has definitely had a greater disruption.
“Mornington is very tight. It’s stark, two very different markets.”
Melbourne Asset Management’s Cameron Osborne agreed it was a two-speed market.
“We’ve got properties there that are advertised and no one’s applied for them for six months,” he said. “We have some that were advertised for $650 down to $400 and we still can’t find anybody for them.
“It’s very tough in the city whereas the outer suburbs are still doing the same sort of market.
“Melbourne city, Carlton, Southbank, there’s just nobody. Nobody coming across the border so no one’s leasing.”
Mr Osborne said it was an unenviable position to be an inner-city landlord during the pandemic, as the lack of international students and migration had slashed demand.
“You wouldn’t want to own an investment in the city at the moment,” he said. “They’ve been building all these extra properties and no one to move into them.
“The only thing is to meet the market. Get somebody into your property at whatever cost. The city is just shot. There’s nobody inquiring.”
Nelson Alexander Carlton North and Fitzroy partner Martin Sizer said since stage four was eased and physical inspections allowed, there’d been a spike in interest.
“We are now treating every day of the week like a Saturday. We’ve spent the majority of this week setting up appointments and getting people through the property to get leases signed,” he said.
“I’d say from Carlton out we’re finding that people are interested. They’ve been waiting to see the properties.
“We still have a lot of stock so there are some where we’re trying to generate interest. But anecdotal feedback from the team is they’re optimistic it’ll be faster that we catch up. They thought it would take six months.”
Source: Thanks smh.com