Melbourne's rental vacancy rate has plummeted to a record low of 1.2%, intensifying the city's housing affordability crisis, according to the Real Estate Institute of Victoria (REIV). The figure, released on Thursday, marks the tightest rental market in the city's history, surpassing the previous low of 1.3% recorded in 2019.
Decline in Available Rentals
The REIV's quarterly report reveals that the number of available rental properties in Melbourne has dropped by 15% over the past three months, with only 4,500 dwellings listed as vacant. This decline is attributed to a surge in demand from returning international students and workers, coupled with a slowdown in new housing construction.
"We are seeing unprecedented pressure on the rental market," said REIV President Adam Docking. "The combination of low supply and high demand is pushing rents higher, making it increasingly difficult for tenants to find affordable housing."
Impact on Tenants
Renters are feeling the pinch, with median weekly rents rising by 8% year-on-year to $520 for a one-bedroom apartment and $680 for a two-bedroom unit. Tenants like Sarah Chen, a university student, describe the struggle. "I've been searching for months and applied for over 20 properties, but I keep getting rejected because there are so many applicants," she said.
Advocacy groups warn that the crisis disproportionately affects low-income households and essential workers. "We are seeing more people forced into overcrowded or substandard housing, and some are even facing homelessness," said Kate Colvin, spokesperson for the Council to Homeless Persons.
Government Response
The Victorian government has announced a $5.3 billion housing package aimed at building 12,000 new social and affordable homes over the next four years. However, critics argue that the measures are insufficient to address the immediate shortage. "We need urgent action to increase supply, including fast-tracking planning approvals and incentivizing private investment in rental housing," said Docking.
The REIV has called for tax reforms to encourage landlords to stay in the market, noting that some investors are selling due to rising costs and regulatory changes. "Without intervention, we risk a further deterioration of the rental market," Docking added.
