Melbourne - outer suburban areas remain the most desirable for renters
It ’ s never been more expensive to rent a house in Melbourne with rents rising by 11 per cent over the past 12 months . Unit rents have also risen but are still on average cheaper than where they were at the end of 2019 . Unlike house prices , it ’ s unlikely that we ’ ll see a slowdown anytime soon for the Melbourne rental market . The city lost people during the pandemic which meant rents didn ’ t rise as much as they otherwise would . Now that international migration is back , and the flow of people to South East Queensland is likely to have stalled , this will create additional pressure on housing demand .
With rents back to growth , this is good news for rental yields . After hitting an all time low of 2.4 per cent at the start of the year , yields on houses are now creeping up and now sit at 2.6 per cent . Unit rental yields are now at 3.9 per cent . If you ’ re an investor , you may not get the high capital return experienced in 2021 over the next 12 months , but rental returns are looking a lot better .
At a suburb level , the desirability of outer suburban areas continues to be a trend in Melbourne . Portsea and Sorrento on the Mornington Peninsula top the list for rental increases . The areas seeing the biggest declines in rents are no longer dominated by inner city apartment markets . With foreign students back and the CBD coming back to life , it appears that people are wanting to live there again . The suburbs seeing the biggest declines in rents are now in the middle suburbs , with Glen Huntly houses seeing a drop of $ 133 per week in advertised rents .
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