Melbourne Suburbs Where Rents Have Dropped

Melbourne Suburbs Where Rents Have Dropped

In March 2009, the median advertised rent for a house in Melbourne was $379 per week compared to $442 this year.

This has equated to a rise of 16.6 per cent over 5 years. Surprisingly there are a number of suburbs where renters have not faced comparable rises and there are even some suburbs where rents have actually dropped.

Three of the four suburbs where rents have fallen are growth suburbs; Doreen, Mernda and Sandhurst. These suburbs are unique cases as the supply of homes is very strong resulting in distortion in the data compared to more established areas.  In this case it has resulted in reductions in the advertised rent.

“Suburbs in the top 20 for low rental growth are Canterbury, Wonga Park, Caulfield, Ashburton and Hawthorn East.”

Advertised rents in Doreen have dropped by 6.4 per cent over 5 years, similar to nearby Mernda which recorded a fall of 5.9 per cent. Sandhurst rents dropped by 2.6 per cent. Rents have also fallen in Ormond and barely changed in Toorak; both suburbs have comparatively expensive houses and this highlights a trend of poor growth in rents in expensive suburbs.

“By targeting certain areas renters can find homes where rents do not continually rise.”

With very low yields in the more expensive suburbs investors are more motivated by the strong capital growth that can be found and renters in this price bracket are clearly in a very different market to the majority of renters in Melbourne.

This article was originally published on RP Data.