Melbourne inner city markets hardest hit by Covid-19 are the most in-demand with international homeseekers looking for a rental, in a positive sign for investors.
The number of foreign residents looking for a Victorian rental property increased 40 per cent in the March quarter compared to 12 months earlier, realestate.com.au figures show.
Melbourne, Docklands and Southbank — the worst affected property markets by the pandemic — are joined by Carlton as the most searched suburbs by offshore rental seekers.
The median unit rent in Melbourne postcode 3000 has risen 13 per cent year-on-year to $450, according to realestate.com.au, as demand returns post-lockdown.
The CBD rental vacancy rate — which hit 10.8 per cent in September 2020 — is now 2.4 per cent as of March, according to SQM Research.
PropTrack economist Angus Moore said opening the country’s borders had been “a big changer” for the rental market, “particularly so for the inner city rental market”, with international students, backpackers and skilled migrants seeking properties.
“Vacancy rates are now lower than they were pre-pandemic, and the number of inner Melbourne rentals listed on realestate.com.au is less than half what it was at its peak in November 2020,” Mr Moore said.
“That’s starting to translate into growing rents in inner Melbourne.”
The two-bedroom, two-bathroom apartment at 2801/350 William St, Melbourne is available to rent for $625 per week.
People, including international students and workers, are returning to Melbourne’s CBD and inner suburbs, driving demand for rental properties. Picture: Ian Currie
New Zealand, India, the UK, the US, Hong Kong and China topped the list of overseas searchers for Victorian property rentals, according to realestate.com.au
SQM Research managing director Louis Christopher said there were 12,400 vacant rental properties in metropolitan Melbourne last month compared to 27,300 the same time last year.
Mr Christopher said this had been caused by multiple factors, including renters returning to the city from regional areas; some landlords withdrawing their properties from the market; and leaseholders being less willing to share with others for fear of catching Covid.
He believed it “likely homelessness will be increasing” as rental stock dried up.
A one-bedroom apartment at 301/2 Chaucer St, St Kilda is on the market with a weekly rent of $300.
The apartment has views of St Kilda, which is popular with international residents looking for a Melbourne property to rent or buy.
International property website Juwai co-founder Daniel Ho said many of the 150,000 student visa holders stuck outside Australia during the pandemic could now return.
“They will add significant heat to rental markets in their most popular suburbs by the end of the year,” Mr Ho said.
Barry Plant Docklands property management associate director Steven Heaven said the amount of people seeking inner city rentals had “gone through the roof”.
“We did 52 lets in February, predominantly half of that would have been with the city stock with international students, people relocating from interstate and also people coming back from the regions,” he said.
Their office recorded 138 vacant rentals across Docklands and the CBD at the pandemic’s height but now only have about seven vacant leasable properties.
Renting a two-bedroom, two-bathroom apartment at 403B/56 Dorcas St, Southbank will set you back $550 per week.
Southbank is the fourth-most popular location for international renters, according to realestate.com.au
The same countries dominating the international rental list were the top nations searching for homes to buy in the state, with Melbourne, Richmond, Toorak, Glen Waverley and St Kilda among the hot spots.
It comes as the Foreign Investment Review Board’s annual report showed a 37.8 per cent decrease in the number of residential real estate proposal approvals year-on-year to 4384.
That national figure was worth $10.4bn.
Fancy a Docklands address? A one-bedroom home at 1016/677 La Trobe Street costs $385 to lease.
Inside the light and airy apartment.
Great city views.
Melbourne Lord Mayor Sally Capp said stamp duty concessions and exemptions on eligible properties meant the inner city had “never been more affordable” for buyers.
“The quality of real estate stock that is available in the city right now should be tempting buyers from all walks of life, from young professionals, savvy investors, to downsizers looking to revel in the buzz of Melbourne’s central entertainment district,” she said.
For $460 per week, a renter could secure this one-bedroom apartment at 1107/250 Elizabeth St, Melbourne.
Melbourne Lord Mayor Sally Capp, introducing the Open Arcade video game at Southbank’s Queensbridge Square, is encouraging investment in the city. Picture: David Crosling