Rents in inner-city Melbourne are struggling under the COVID lockdown but they are performing better in the outer suburbs.
Melbourne unit rents have been the hardest hit, copping a battering under the weight of the city’s lockdown and falling to a median of $400 a week.
Domain senior research analyst Nicola Powell said the number of vacant rental properties in Melbourne had doubled since March.
“The pandemic has had a once-in-a-lifetime impact on the rental market, reducing demand at a time supply has bounced,” she told Australian Financial Review.
“Fragmented conditions in the rental market remain evident in the September quarter, with weaker unit rents compared to houses.
“This is particularly so in inner-city areas, which are more susceptible to changes in overseas migration and international students, tourism and job losses associated with COVID-19.”
Property investor Victor Kumar from Right Property Group said up in Sydney, he had some clients who had to drop their inner-city rents by up to $50 a week while at the same time some tenants were getting drawn into bidding wars in outer suburbs, driving up prices.
“Whenever there is a crisis, there’s a compression factor that happens,” he told AFR.
“People who had previously moved into the bright lights of the city are then finding rents too high or they need to look at costs because they’ve either had their hours cut or they’ve lost their jobs.”
Melbourne median house and unit rent prices
Houses (Sept20) Change (YoY%) Units (Sep20) Change (YoY%)
$440 +2.3 $400 -4.8%