As September 2010 passes, renters in Victoria have again seen a month with no sign of future improvement for rental property vacancy rates.
The REIV (Real Estate Institute of Victoria) released its August 2010 findings recently, with a tiny 1.7% of all rental properties vacant for aspiring tenants to compete for. This is no change whatsoever from the preceding month of July, and only a little better than over the same period in 2009.
Historically, this is a massive shift in terms of housing availability for renters. For example, in August of 2003 there were many more vacant homes for renters, with the official vacancy rate sitting over twice the current level at 3.6%.
The problem stems from a lack of construction of new properties, as well as inadequate levels of investment in the residential real estate industry. Analysts don’t anticipate any change to this pattern in Melbourne, be it in the short or medium term.
What does this mean for tenants? The answer is unfortunate. Renters will have to pay higher rents if they are even able to secure a house to rent, as there is so much competition amongst those who need a place to live. Tenants will also have to settle for a house that may not be in their desired area, or in a style of home they wouldn’t normally choose to live.
If you look at Melbourne’s metropolitan area as a whole, the hardest place to find a vacant rental property is in the outer suburbs. In August these areas had a miniscule vacancy rate of 0.8%, down from 1.3% in July 2010.
Melbourne’s prestigious inner suburbs, or Zone 1, which sit within 10 kilometres of the city centre, had a property vacancy rate of 1.8%, nearly identical to that of the ‘middle band’ of suburbs located between the two areas, which had 1.9% of rental properties available for tenancy.
However, the situation for regional Victorians is even direr than in Melbourne. Vacant houses and units are very hard to come by, with Bendigo recording a paltry vacancy rate of 0.4%, Ballarat 1.0% and the Geelong area 1.4%. In Bendigo, the rate has been below 0.5% for over an entire year, giving it the sad title of, ‘Most difficult place to rent a home in Victoria’.