Domain Newsletter

Domain Charter News

Vacancy rates plummet in outer suburbs

REIV August data has shown that rental vacancy rates in Melbourne’s outer suburbs have dropped significantly since August 2006 from 1.9% to 0.7% in August 2009. This represents a chronic shortage of affordable rental housing in the expanding growth corridors of Melbourne.

Access to rental housing was still very difficult as vacancy rates overall in Melbourne had remained between 1.2% and 1.4% over the last 12 months, according to REIV spokesperson Robert Larocca.

Mr Larocca went on further to say, “The REIV had hoped that the increased numbers of first home buyers moving from the rental market into their own homes may have led to an increase in the vacancy rate, but this does not appear to have occurred yet.

“There are two reasons why it’s hard to find rental accommodation in Melbourne at the moment, the city’s population is increasing by around 1,700 per week and there are not enough homes being built to keep up with demand.

“The shortage of rental homes has become one the most intractable problems in the housing market. To fix the problem the vacancy rate needs to be lifted to 3 per cent and the last time it was 3 per cent was in January 2005. Meeting this goal will require substantial private and public investment,” Mr Larocca concluded.

Rental vacancy rates
August 2006 to August 2009 

Aug
2009 

 Jul
2009

Aug
2008

 Aug
2006

Melbourne:   Inner (0-4Km)

 1.0%

1.2%

1.1%

 1.2%

                   Inner (4-10Km)

 1.5%

1.1%

1.4% 

 1.9%

       Inner:   Total

 1.3%

 1.1%

 1.2%

 1.8%

                   Middle

 1.7%

 1.4%

 1.7%

 1.2%

                   Outer

 0.7%

 0.9%

 0.9%

 1.9%

Melbourne:   Total

 1.4%

 1.2%

 1.4%

 1.9%

Source: REIV