Beller's Luke Spence provides an update on the Melbourne rental market
Beller's Head of Business Development and Leasing, Luke Spence recently provided Urban.com.au with an insight into Melbourne's rental market, which shows no signs of cooling down, despite the winter months.
He discusses the impact of population growth on low residential vacancy rates in Melbourne, in addition to which suburbs are the most popular for particular buyers.
Spence is an experienced young real estate agent who has recently been shortlisted as a finalist for the REIV Awards for Excellence ‘Outstanding Young Agent of the Year 2017’ and ‘Business Development Manager of the Year (Property Management)’ in the nationally recognised 2017 Real Estate Business Awards.
Frequently publicised as the tightest rental market within Australia, Spence has observed that Melbourne’s metro market has experienced another drop in vacancy rate statistics.
According to Spence, the first quarter of 2018 demonstrated a drop of 0.3% from December 2017, and the second quarter appears to be following suit.
Additionally, the statistics show that January and February 2018 saw vacancy rates steady at 1.9%, while March displayed 1.8%, and April dropped another 0.1% to 1.7%.
Spence says areas with very low vacancy rates (typically sub-2%) are often referred to as ‘tight’ rental markets where rents are more likely to be increased, providing landlords with their pick of tenants, in what is otherwise known as a landlords market.
With 110,000 people relocating to Melbourne each year, this has driven down the city's vacancy rates, making it the population growth leader of Australia.
Spence names Fitzroy, Carlton & St Kilda with at least 1,800 listing views per property, as among the best performing suburbs in Melbourne. St Kilda East is next with at least 1,700 views per listing and suburbs like Elwood, South Yarra and North Melbourne average between 1,400 and 1,500 views per listing.
For units and apartments specifically, Clifton Hill is leading the charge with 1,800 views per property listing. Albert Park and Fitzroy North are also popular with 1,700 views and 1,400 views respectively, while Hampton East and Caulfield also average 1,200 – 1,300 views per listing.
Spence believes that despite it being a landlord’s market, that doesn’t necessarily mean that little effort is required on their part to attract tenants, with prospective tenants citing cleanliness and presentation as the top priorities.
So, it’s a landlord’s market, right? Well, this may be good news for investors, but it doesn’t mean you are immune to the scrutiny of tenants.
The rental statistics in Melbourne are favourable for landlords, but it doesn’t mean you can take your foot off the accelerator when it comes to ensuring your investment performs the best it can. Tenants call the shots when it comes to dictating the success of your investment.
After each tenancy, it is vital that your property is clean and presentable to maximise tenant interest (even if it means putting in some elbow grease yourself). I've been leasing homes for over 11 years, and the top things every tenant looks for when choosing their next home is cleanliness and presentation – no matter how low the vacancy rates are!
- Luke Spence, Head of Business Development and Leasing, Beller