The 2022 Melbourne rental property market is teeming with hope. Of course, considering the extraordinary events of the past two years, hope is a very understandable – even necessary – response. For example, rents in the Victorian capital city dropped considerably during 2021, making it one of the cheapest capital cities in which to find a rental property, amazingly. There are clear indications, however, during the early stages of 2022 that the Melbourne rental property market is currently experiencing an upturn in robustness, within both the unfurnished executive and fully furnished markets.
The Kay & Burton Property Management Division can report a recent rise in demand for quality houses, apartments and family homes located throughout the Stonnington and Boroondara areas. This demand is being driven by both domestic and international clientele, the demand by the latter resulting from Australia finally re-opening its borders to the greater global community after a hard 2-year lockout. Furthermore, expectation of even higher demand in the coming months is growing, which will inevitably increase rental prices across the board. This growth in demand will be fuelled by a significant shortage of available suitable rental properties, with “suitable” serving as the operative word. Melbourne rental vacancy rates continue to be low and will most likely tighten over 2022.
With the property sales market currently experiencing an unexpected buoyancy, this indicates that homeowners are choosing to sell versus rent, significantly reducing the overall available rental stock. In light of this, family homes have been achieving outstanding results with weekly rents rarely achieved in Melbourne. Partner, New Business and Corporate Leasing Darren McMullin describes a case in point: “We recently had two exceptional applications on a large Toorak property at $5,500 per week which leased after negotiating between the parties in just one week.” Kay & Burton Property Management is witnessing an increase in enquiries across a broad range of properties, from 1-bedroom apartments to 6-bedroom executive homes. In addition to this broader range, there is an increasing trend towards properties being leased after 1-2 viewings. This simply demonstrates the strength of the current demand. Another consideration is the proliferation of locals choosing to renovate their primary places of residence and often requiring an interim residence for the uncertain (often long) duration of the renovation. Finally, it is very much worth mentioning that multinational corporations are also resuming the relocation of senior executives to Melbourne, again increasing the demand for high-end unfurnished properties.
To complement this increased demand for unfurnished executive rental properties is a simultaneous significant increase in the demand for fully furnished properties on the city fringe, specifically. This momentum, as well, is due to a myriad of factors. Expats are returning to Melbourne in droves and are often in between homes upon their arrival. There is often a preference for the convenience of a furnished property while awaiting the return to the primary place of residence or the completion of the purchase of a property. At times, as well, expats look to lease something longer term while awaiting the arrival of their own furniture from overseas. The current unreliability of global shipping is responsible for this. Multiple parties are viewing high-demand properties in high-demand areas, and these properties are being leased after a relatively short time on the market.
Other influences affecting this recent growth in the demand for fully furnished properties include the arrival of healthcare workers from both interstate and overseas and the return of international students. As with the augmentation in demand for unfurnished executive rental properties, owners committing to major renovations on their principal primary residences and looking for a 6-to-12-month lease and domestic and international corporate relocations not seen since pre 2020 are also growing this sub-market. Fully Furnished & Corporate Leasing Manager Debbie Davut explains this current rental phenomenon: “We are currently experiencing very high demand for quality furnished properties on the city fringe – notably South Yarra, St Kilda Road and East Melbourne – where furnished properties in buildings with amenities and walkability to shops and transportation are leasing very quickly and at noticeably higher rentals than during 2020-2021 (in many cases, 10-20% higher per week).” In other words, if researched thoroughly, investing currently in the Melbourne rental property market is a wise and rewarding financial choice.
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