Rents in some of Melbourne’s most expensive suburbs are on the rise, the latest Domain Rent Report shows, bucking the trend of rents closer to the city that have fallen by as much as 21 per cent.
Sea-changing tenants still chasing a better lifestyle through Melbourne’s persistent lockdowns prompted rent rises in expensive Bayside and Mornington Peninsula suburbs. Buxton Brighton property management department manager Michelle Murray said demand was huge from tenants wanting to be closer to the beach, even those costing more than $3000 per week to rent.
“There is a queue of people looking to rent in the $3000-plus price bracket and I’ve never had that many people waiting before,” Ms Murray said.
Beaumaris had been particularly popular, with rents jumping by 4 per cent over the year to September, to a median of $840, the data showed.
In nearby Black Rock, rents also rose by 1.9 per cent over the year, to a median $810 per week, making them two of the state’s top 10 most expensive suburbs in which to rent a house.
Most expensive rents rises and falls – Melbourne
“A lot of clients have been selling their homes, taking advantage of the [booming] sales market, and then renting when they wouldn’t necessarily have otherwise,” Ms Murray said.
“People are also doing massive renovations because they want a resort-style home in case of more COVID-19 lockdowns, and are renting while they do.”
With Victorian and international borders due to reopen by the end of the year, Ms Murray said she expected the market to become “even more frantic” as more families looked to rent by the bay.
It was a similar story along the Mornington Peninsula, where seven of the top 10 rises in rents across the state were recorded.
One of the most expensive suburbs in which to rent a house was Mount Eliza, where rents rose by 3.8 per cent to a median of $750 per week over the year.
McEwing Partners property manager Melissa Sarmiento said there had been a lot of demand but not much stock coming to the Peninsula market, leaving renters desperate to find somewhere to live.
“A lot of people have moved from the city or owners are choosing to move into their investments or to sell up and the home becomes an owner-occupier,” Ms Sarmiento said.
Top 10 rent rises by suburb – Melbourne
She said rental houses in the more expensive brackets were doing exceptionally well, with a home recently listed for $1450 per week in Mount Eliza gaining a lot of early interest.
While the seaside suburbs were gaining a lot of interest, so too were houses in the ritzy suburb of Toorak, which recorded the highest rent across the city of $950 per week.
Though rents fell by 0.5 per cent over the year in Toorak, RT Edgar senior property manager Tom Newman said the top end of the market was busier than ever.
The market was “hugely competitive”, especially around the $1200 to $1500 per week price point, Mr Newman said.
“The bottom end of the market has been suffering through the pandemic but the top end of the market hasn’t at all,” he said.
AMP Capital chief economist Shane Oliver said that, much like the sales market, the top end of the rental market had not been as affected by pandemic lockdowns and job losses.
“There used to be a desire to be closer to the city and to work so people rented apartments, but that seems to be changing and it’s been made possible by the phenomenon of working from home,” Mr Oliver said.
He said the growing gap between rents in city apartments and lifestyle homes in more expensive areas could remain wide permanently as people combined working from home with a return to the office.
“But I don’t think investors should despair in inner-city areas; migrants will return and there will be a full catch-up in the market like we have seen in other countries.”