Melbourne unit rents are at a record high, jumping $25 a week over the past year and adding further pressure to tenants searching for an affordable home. The median asking rent for a unit reached $600 a week in the September quarter, while a typical house now costs the same after rising $20 a week over the year, Domain's Rent Report showed.
Rents were steady over the past three months and the vacancy rate was flat but tight at 1.4 per cent. Although September is a quiet time for the rental market, experts say a lack of available properties is fuelling competition and keeping rents high.
The largest rises this quarter came in the unit market, a sign tenants are looking for cheaper rentals. Unit rents rose 3.3 per cent in the inner east to $620 a week, 2 per cent in the north-east and 1.1 per cent in the west. The inner south was the only region where house rents rose.
Domain chief of research and economics Dr Nicola Powell said Melbourne remained a landlords' market, with the vacancy rate below the level considered balanced.
'Investors left the market in Melbourne a while ago because of weak capital growth and higher land taxes at a state level, so the exposure to further changes is going to be less so than other capital cities,' she said of the federal tax changes for property investors announced in the May budget.
Grattan Institute senior associate Matthew Bowes agreed the changes would not have a significant impact. 'The federal tax changes won't significantly change housing demand. Lots of new owner-occupiers will take up housing and that will balance the market.'
Bowes said Melbourne was in better shape than other capitals because more houses had been built, which would help lower competition for rentals.
The search remains difficult for many tenants. Declan Kelly, who is looking for a home in Melbourne's west, has applied for at least 15 rental properties over the past month. 'I've been applying for everything.'