I am perhaps stating the obvious in saying that the last few years have not been kind to your typical Melbourne property investor, with real house prices falling and rents stagnating since June 2010 (see below chart).
Now, the Real Estate Institute of Victoria (REIV) is predicting a continuation of the lacklustre conditions, with nominal rents expected to remain flat or possibly fall in the period ahead. From Property Observer:
Rental prices across Melbourne and regional Victoria are expected to stabilise as rental vacancy rates across the state continue to ease.
The median rent for a house in Melbourne increased slightly to $381 during the month of December, while regional Victorian rents stabilised at $300 per week, according to REIV.
The vacancy rate in Melbourne over the month of December increased slightly from November’s 2.2% to 2.3%…
Although the availability of rental homes is easing, it is yet to transfer into landlords reducing or stabilising rental prices.
Enzo Raimondo, the chief of the REIV, forecasts rents will either stabilise or reduce in nominal terms if the trend continues.
“The improved level of vacancies has not yet translated into lower rents being asked by landlords; however if the trend continues, as it is expected to, it will in time result in overall rents either stabilising or reducing in nominal terms,” he says.
“REIV research indicates that they have generally fallen in real terms as the higher availability of rental homes has improved.
Looks like more of the same for the Melbourne housing market…
