Melbourne rents: Student suburbs smashed but holiday homes boost Mornington Peninsula
Melbourne rent prices have recorded double-digit falls in some suburbs amid the pandemic-induced recession, with inner-city student neighbourhoods among the worst affected.
But the hit to the rental market has been unequally distributed, with a handful of coastal holiday hotspots commanding higher rents than a year ago, the Domain Rent Report for the June quarter showed.
High-density inner-city neighbourhoods recorded sharp price drops, with Docklands unit rents falling 8.6 per cent in the year to June, the CBD down 7.4 per cent and Southbank down 7.1 per cent.
The worst-hit suburb was MacLeod, where asking rents for units declined 12.9 per cent over the past year. Houses in Werribee South and Mont Albert each fell 12.5 per cent.
Domain senior research analyst Dr Nicola Powell said in most cases student rental suburbs would be hurt the most as they made up a significant part of the rental market in Melbourne.
“There’s a clear example of an impact of fewer students on markets,” she said. “We’re seeing different areas reacting differently depending on their reliance on overseas visitors for students or holidays.
“Not only are we seeing fewer foreign students but those domestic students are looking at staying home.”
Melbourne suburbs where rents fell most, past year
|Suburb||Property Type||Median weekly asking rent||Annual change, median rent|
Many international student tenants have moved out and returned to their home countries, or have not yet been able to return to Australia, Nelson Alexander Docklands’ rental department manager Heidi Sparkssaid.
“We’re having to reduce, or adjust, our pricing on the rental side,” she said.
“A lot of people are not renewing … If they are renewing, they’re asking for a lower rent in some cases. In some cases not.”
Landlords of available properties were usually willing to consider price reductions to avoid homes sitting vacant, Ms Sparks said.
With discounts available, some young professionals from the suburbs have been taking the opportunity to move into the city, she added.
But in the usually student-saturated Carlton, rents were stagnant for houses and fell just 2.2 per cent for units.
Dr Powell said this could be due to the suburb remaining desirable to other Melburnians.
In Carlton, renter Flo Little had just landed a new apartment on Rathdowne Street, a location she was pleased to secure.
Although she gained the tenancy through a lease transfer and could not haggle over the price, she felt the rent was already fair. She also wanted the flexibility that was on offer because another tenant handed in their keys early.
“They had three months left on the lease so we’d taken it over,” said Ms Little. “It was less of a commitment, and it’s an apartment so we didn’t want to be stuck in one for summer so the three months is a good amount of time.”
Other suburbs bucked the trend, with house rents jumping 22.9 per cent in Hughesdale over the past year, and at least 11 per cent in Glen Huntly and Somers.
Melbourne suburbs where rents rose most, past year
|Suburb||Type||Median weekly asking rent||Annual change, median rent|
|St Kilda West||House||$850||10.0%|
Dr Powell said the most interesting trend was on the Mornington Peninsula.
“What we’ve seen is a lot of the holiday let mansions coming onto the long-term market and it’s not so much [that] rents are growing – we’ve seen what’s on the market change,” she said.
More people were escaping the city to their holiday homes in the area, rather than renting them out as they usually would, he said, meaning the few leftover rentals were being snapped up quickly.
“It’s very difficult to get a rental at the moment – people are taking longer leases and owners are putting their prices up – it’s simple supply and demand,” Mr Curtain said.
He did not think properties that would usually be Airbnbs were coming onto the rental market, but rather being used as permanent residences by their owners.
“People working from home are looking to bring the kids down here and work from their holiday homes,” he said.