Parallel to Melbourne’s rapidly changing inner urban landscape, the city rental market is evolving, both for tenants and landlords. Whilst the increasing popularity of low-maintenance homes and the convenience of city living is apparent, Melbourne’s growing population is the key driver behind the changing rental market.
“Local rental demand has never been higher,” confirms Lucas Property Mangement Director Dylan Emmett, whose team leased over 1,000 properties during the past financial year. “Year on year, we are experiencing an increasing number of potential tenants who exclusively want low-maintenance city living.”
Excited by the changing rental market, Dylan adds, “the seasonal rental surges are no more, with the spring-summer leasing season now strong sustained demand all year round. Whilst traditionally there has always been high demand from students and young professionals, we have seen a broader demographic shift with our tenants now of varying ages and working statuses, from singles and couples to families and empty nesters - pleasingly resulting in higher quality tenants for our landlords.”
With almost half a million jobs already based in the City of Melbourne and as more world-leading corporations opt to set up headquarters locally, the number of city workers seeking short-term local homes is only set to increase. Today’s city tenants are primarily location and lifestyle driven, wanting easy access to amenities and infrastructure. However, increasing competition and rental prices are now often dictating the living options and choice of address for many tenants.
Landlords are enjoying the strength of the local market, with the average rental returns for all apartments types in Melbourne CBD, Southbank and Docklands in excess of 5 per cent and vacancy rates consistently under 1 per cent. Melbourne apartments also enjoyed an average 5.3 per cent increase in median price in the past year, the highest growth rate of any Australian capital city. Future investors should note the increasing popularity of one bedroom apartments, both with and without carparks, where rental returns are now between 6-7 per cent on average.
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To find out more about existing tenant demand for your property, or to discuss the investment potential of your current property, contact Dylan on 0402 465 779 or 9091 1400.