The REIV has released its rental data for November, and it shows the vacancy rate for Victoria has increased from 1.9% to 2%, with Melbourne’s increasing from 1.9% to 2.2% and a mild tightening in regional Victoria from 2 to 1.8%.
While this is an improvement for those looking to rent a home, higher vacancy rates can reduce the returns for the tens of thousands who own and rent out investment properties.
There was a minor variation in the median rent charged for houses in Melbourne, with an increase of $10 per week to $380. The median rent for units was stable at $350 per week.
The level of vacancies in Melbourne is relatively even across the city. A vacancy rate of between 2 and 2.2% was found across the city. When compared with previous months there was a substantial tightening of the vacancy rate in the inner city, where it fell from 2.6% in October to 2.2%. This shows that the new apartments being purchased by investors are slowing being absorbed into the market.
In contrast the vacancy rate in the outer suburbs nearly doubled from 1.1% to 2%. This easing has not yet been apparent in rents being charged as they remained stable.
Within regional Victoria the vacancy rate tightened in Geelong from 2.8% to 2.1%, was stable in Ballarat at 1.5% and eased slightly in Bendigo from 0.7% to 1%.
The overall rental market is well balanced at the moment, and it is unlikely that there will be any substantial increases in overall rents charged while the vacancy rate remains between 2% and 3%.
Enzo Raimondo is CEO of the Real Estate Institute of Victoria.