‘Fighting a losing battle’: Melbourne suburbs where rents have soared
Rents have soared across a string of affordable suburbs in Melbourne’s north, forcing struggling tenants to look even further afield.
The cost of renting a house in Jacana rose by 24.3 per cent to a median of $460 a week, while the median weekly rent for a unit in neighbouring Broadmeadows has climbed by 25 per cent. Houses in Sunshine and Lalor had rent rises of 22.5 per cent each.
Median rents in Melbourne’s north-east and north-west recorded a 14.3 per cent increase in the 12 months to June, the latest Domain Rent Report has revealed.
Domain head of research Dr Nicola Powell said the cost of renting in Melbourne has forced tenants to move further out, pushing up demand and prices in the middle and outer suburbs.
“It’s the premium locations that have seen greater weakness, but it is those middle belt suburbs that are traditionally more affordable locations that have seen greater price pressures,” Powell said.
“The stretched nature of household balance sheets over the last couple of years has been extreme, and I think that tenants are feeling that just as much as those that have a mortgage ... they make decisions that mean they might have to move, not just one suburb, but a few suburbs, in order to find and seek that affordability.”
Noeline Aitken, 76, spent six months looking for a rental property before finding an affordable unit in Brunswick.
After two relationship breakdowns and a year renting by herself in Werribee, Aitken was forced to choose between living with a former partner or facing homelessness.
“My marriage broke up and we had to sell the house,” Aitken said. “I was paranoid about becoming homeless because I knew I didn’t have enough to buy anything in Melbourne.
“I think [some] women have to make that choice ... you stay in that relationship, or you’re homeless.”
After six months of searching, 76-year-old Noeline Aitken and her cat Casper finally found a unit in Brunswick she could afford via HomeGround Real Estate. Credit: Joe Armao
She hoped to move to the inner north to be closer to her adult children but said attending countless inspections and filling out applications felt like a stressful full-time job.
“Anything in my price range was horrible, but beggars can’t be choosers. It was sort of like fighting a losing battle to get something,” Aitken told The Age.
She said she felt privileged when she finally secured a lease that she can afford on her weekly pension after competing against applicants on dual incomes.
“With me on the pension, I had no hope competing against all of them. It was really, really demoralising.”
Aitken said she would still be looking for a place to live if she had not come across a discounted property being leased via HomeGround Real Estate, a property management agency which offers rentals at or below market value.
HomeGround Real Estate property manager Emma Noble has seen more people applying for discounted rental properties in recent months.
“We have observed more people who are desperate to secure affordable housing options ... housing is considered affordable when it costs no more than 30 per cent of a person’s income, however, for low-income earners, few rental properties fall within this range,” Noble said.
“We are seeing people who are forced into seeking lower rents and appear to be willing to sacrifice certain amenities in favour of more affordable housing options due to rising rents and general pressures associated with increased cost of living.”
Westpac senior economist Matthew Hassan said the shortage of rental stock combined with increased demand had contributed to climbing rent prices, causing a spillover effect as renters were priced out of their preferred suburbs.
“What we’re seeing is demand in the most desirable end of the market driving the cost of rents up, so would-be tenants are starting to push out into other markets,” Hassan said.
“As renters start to move down the curve, it displaces other renters who may start to look down the curve as well. It’s a pretty worrying sign.”
Hassan added that Victorian investors selling up following increases to land tax last year had caused a reduction in the number of available rental properties.
Rents have risen in a string of affordable suburbs across Melbourne.Credit: Oscar Colman
“It’s likely that owner occupiers are moving into those spaces, and it’s indirectly shrinking the available stock of rental housing.”
Ray White Glenroy director Mete Karan has seen competitive tenants in Broadmeadows and Jacana offer up to six months, and in some cases an entire year, of rent in advance to secure a property.
The number of people attending inspections in the area has more than doubled for some properties.
“Once upon a time, Broadmeadows was just local people, and now we’re finding people coming from all parts of Melbourne,” Karan said.
“We’re getting a lot of young couples that can’t afford the inner northern suburbs.”
Karan said while rents have climbed in the area, suburbs like Broadmeadows and Jacana still offered cheaper rentals than other parts of Melbourne.