Since the vacancy rate dropped to a 10-year low during 2017, the focus is on whether the investment market will remain within a “landlord” or “tenants” market. This will determine whether the median rents will continue to climb as they have done for the past few years.
From the December 2016 stats to December 2017 the vacancy rate had dropped 0.1% to 2.2%. While this is not a large drop, this is historic as it has remained at the same lowering vacancy rates meaning that it is possible to achieve the higher rental increase.
For landlords, this is positive as there is less stock throughout the investment market. This means you can have lower loss/no of income and most properties coming back with multiple applications from prospective tenants. There is also room to increase the asking prices throughout.
For tenants, this market can bring uncertainty with the adverse perspective of the landlord’s positives. This also poses a high risk for some low socio-economic families. The rental report by the DHHS, shows that only 15.1% of new lettings throughout Victoria were affordable to low-income households. This downward trend of affordable lettings have been consistent since December 2013.
The demand for rental properties throughout Melbourne is remaining high due to both migration and immigration. Last year, Melbourne had the biggest population growth of any Australian city. This means, that the prediction for vacancy rates will remain low as the demand continues to grow.
If you were wanting to look at investing, with very low vacancy rates and high interest from both the migration into metropolitan Melbourne currently and the forecasted rates into the future – speak with us as it is a great time to invest!