Melbourne suburbs where rents have dropped

Melbourne suburbs - RP DataIn 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.

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. 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. Other similar suburbs in the top 20 for low rental growth are Canterbury, Wonga Park, Caulfield, Ashburton and Hawthorn East.

This highlights that by targeting certain areas renters can find homes where rents do not continually rise.

Melbourne suburbs where rents have dropped April2014

Robert Larocca
RP Data Victoria Housing Market Specialist

About Robert Larocca

Robert Larocca has built a profile over the past eight years as an expert on the Victorian residential property market. He worked for the REIV both directly and as a consultant over 8 years acting as a spokesperson, managing its research department and public policy. He has been a media and government relations consultant and spent a decade working across the three levels of government including as a Councillor and Mayor in the City of Moreland. He has well developed leadership skills in the not for profit sector and has been the Chairperson of CERES Community Environment Park for 9 years.

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