Rents Go Through The Roof

RENTS are soaring in Melbourne, despite increased vacancy rates, a report reveals.

The median weekly rental price in Melbourne rose $10, or 5.3 per cent, to $200 in the year to September, the Office of Housing report shows. Country rental prices remained stable at $135 a week.

The most expensive region was inner Melbourne, with tenants paying top dollar to live in Port Melbourne.

The cheapest rentals were in southeastern Melbourne, including Berwick, Springvale, and Dandenong, and the Mornington Peninsula, which had a median of $165.

Southern Melbourne, including bayside suburbs from Brighton to Carrum, experienced the biggest price growth. The median rental price increased 7.3 per cent to $220 a week, with two-bedroom flats rising 5.6 per cent to $190.

Three-bedroom flats are the most expensive properties to rent, tenants paying a median of $230 a week.

But across Melbourne one-bedroom flat prices have grown the most, up 6.9 per cent to $155 in 12 months. The number of people signing leases increased 8.8 per cent over the 12 months.

There are more people living in smaller homes, with a 7.3 per cent growth in the number of people moving to one-bedroom apartments.

MacroPlan managing director Brian Haratsis said there were more young people working from home and older couples looking for small apartments. Figures showed less than 5 per cent of housing was affordable for low-income workers in eight municipalities -- all in the inner suburbs.

Tenants Union of Victoria policy and liaison worker Michelle Marven said low-income tenants struggled to pay exorbitant rents and were forced to move away from inner suburbs.

The value of housing investment loans approved in Victoria rose 14.5 per cent to $2.12 billion in the three months to September.

Source: The Melbourne Herald Sun Newspaper, April 18 2002
Author: Michelle Rose

PropertyInvesting.com Comment

This article includes some interesting statistics which again underpin where you are likely to find positive cashflow properties. Melbourne median rents rose to $200 per week (equivalent property price of $100,000 under the 11 second solution) whereas country prices were stable at $135 per week (equivalent property price of $62,500 under the 11 second solution).

I also note with interest the potential niche market of "MacroPlan managing director Brian Haratsis said there were more young people working from home and older couples looking for small apartments."

Perhaps money could be made renting properties to older couples in country areas at $135 per week? Final point - housing investment loans in three months were $2.12b. Let's see how this figure moves in future months as interest rates change.