Melbourne house and unit rents at record high: Domain

Melbourne house and unit rental prices continue to rise, with both achieving new record highs, according to the latest research from Domain.

Domain found Melbourne house rents increased 2.3 per cent over the quarter and 3.5 per cent over the year to $440 per week, while rental yields improved 1.4 per cent over the quarter and 4.4 per cent over the year to 3.20 per cent. 

Unit rents remained unmoved over the quarter, but increased 2.5 per cent over the year to $410 per week.

Unit rental yields improved 0.7 per cent over the quarter and 2.7 per cent over the year to 4.41 per cent. 

Domain Senior Research Analyst, Dr Nicola Powell said, “despite a large pipeline of new apartments hitting the rental market in recent years, competition has been driven by strong population growth. However, with interstate and overseas migration slowing from their historical highs, we could see demand soften over the longer term.”

“Gross yields have improved, suggesting rental prices are holding firmer relative to property values. This improvement may not be enough to entice investor activity, given that the prospects of short-term capital gains are minimal. High purchasing costs mean gross yields are low, suggesting many investors have been attracted by the previously strong capital gains or the tax benefits of negative gearing,” she concluded