The rental vacancy rate in Victoria has hit a record low, the state’s peak real estate body says, and the swelling population has been blamed.
The latest figures from the Real Estate Institute of Victoria (REIV) show the vacancy rate dropped to just 1.8 per cent in July.
That’s the lowest it has been in the 16 years since the REIV began collecting such data.
It’s also well below the 3 per cent rate the REIV says is needed for a healthy rental market, where there is enough supply to meet demand.
Renters in regional Victoria are having the hardest time finding a home: the vacancy rate outside of Melbourne dropped to 1.5 per cent, from 2.3 per cent a year ago.
Vacancy rates in Melbourne’s outer suburbs were also below the state rate, sitting at 1.6 per cent.
“The vacancy rate has been on a slow, steady decline since before 2014, basically driven by strong population growth,” Tenants Victoria CEO Mark O’Brien said.
“There’s not really been a supply response to reflect that strong population growth.”
Victoria’s population grew by 2.3 per cent — or 143,000 residents — last year, according to the Australian Bureau of Statistics.
Rental data from the Victorian Department of Health and Human Services (DHHS) confirms this. As Melbourne’s population has ballooned by 1.2 million people (33%) over the past 13-years, real inflation-adjusted rents have surged in Melbourne:
The proportion of new rental lettings ‘affordable’ to lower income households has also crashed to a record low 4.5% – way down on the circa 30% recorded between 2000 and 2006, as well as the 12% recorded in 2012 and 2014:
And there is almost no affordable rentals available in the inner-city:
This is pure evil by Australia’s policy makers. Not only has the mass immigration policy robbed Melbourne’s youth and the vulnerable of the opportunity to purchase a home, but it is driving up their cost of living via rents as well.
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
