“Outer Melbourne Suburbs
Powering Rental Growth”
Source: The Age
Date: Monday, 22 March 2010
Author: Matthew Bell, Australian Property Monitors
“Rents are expected to start rising again in 2010 after a relatively flat rental market last year. Mortgage costs for landlords have already increased with interest rates rises, and tenants are likely to agree to rental increases, with average weekly earnings growing strongly and trend unemployment peaking at 6 per cent.
Rental vacancy rates for outer Melbourne fell from 1.2 per cent in September to 0.6 per cent in November, showing very high demand for rental properties in suburbs more than 20km from the city. It’s interesting to examine how rents for two-bedroom units and three-bedroom houses have changed in the 12 months to February for the inner, middle and outer rings of Melbourne.
As the chart shows, the median weekly rent for two-bedroom units in inner Melbourne (within 10km of the central business district) remained flat at $350.
While middle (10-20km) and outer (20km+) ring suburbs have lower median two-bedroom unit rents for two-bedroom unit rents for $300 and $265 respectively, overall rents for two-bedroom units across Melbourne have shown growth over the past 12 months, particularly for suburbs in the outer ring.
The performance of the outer ring is even more eye-catching when looking at rents for three-bedroom houses, with those suburbs showing 6.7 per cent growth compared with 0 to 1 per cent for suburbs within 20km of the CBD.”