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How to Beat the Rental Crisis in Melbourne?

Updated: 5 days ago


How to beat the rental crisis in melbourne

The Melbourne rental crisis has made finding affordable and suitable accommodation a daunting task for many. With soaring rental prices and high competition, it's essential to have a solid plan and use all available resources to secure a place. This article will help you understand what is happening and how you can self-help to beat the rental crisis, without relying on rental search agents.


What is Happening with the Melbourne Rental Crisis?

In recent years, post the covid pandemic, Melbourne has been experiencing an unprecedented surge in rental demangs, causing a severe shortage in rental properties. This has resulted in rent prices rising between 10-20% annually for the past 2 years, since 2022. The rental crisis is not unique to Melbourne only. In fact, all major cities in Australia is experience some form of rental shortage. But in no other places has the rental crisis been as severe as Melbourne. Speaking with some property managers, there can be up to 100-200 rental applications for each available rental property.


What caused the rental shortage in Melbourne?

The rental crisis in Melbourne is caused by a perfect combination of problems.

  1. Influx of New Migrants into Melbourne. Melbourne has experienced a significant influx of migrants, both from overseas and interstate. In 2023, Melbourne's population surpassed Sydney, making it Australia’s most populous city. This surge in population has increased the demand for rental properties, putting pressure on the already limited housing supply.

  2. Property investors retreating from the Victorian property Market. The introduction of new Minimal Rental Standards aimed at improving the quality of rental accommodation has backfired and led to a retreat of property investors from the Victorian market. These standards require rental properties to meet certain criteria, which can be costly for landlords to implement.

  3. Higher Interest Rates. For many years, the Australian property market thrived under low-interest rates. However, recent increases in interest rates have reduced the profit margins for landlords, making it less attractive to offer properties for rent. Landlords also have no choice but to increase the rent, to reduce their mortgage loss.

  4. Over-cooking the Rental Standards. While certain standards related to fire and safety are necessary, some of the new minimum requirements have been seen as excessive. Standards such as the minimum cooktop size and specific curtain/blind requirements often exceed those of the landlord’s primary residence. Upgrading properties to meet these standards can often cost landlords between $10,000 and $20,000, squeezing their profit margins and forcing many to sell their investment properties.

  5. Increased Land Tax. Landlords have often been perceived as wealthy, but this is not the case for the majority. Most property investors spend more on mortgage repayments, maintenance, and repairs than they collect in rent. The substantial increase in land tax in Victoria, introduced to cover the government budget shortfall, has further burdened landlords, making it financially unsustainable to maintain rental properties, without increase the rental price.

  6. Investors selling out. The combination of higher interest rates, stringent rental standards, and increased land taxes has made it unprofitable for many landlords to maintain their rental properties in Victoria. Consequently, many property investors are selling their properties and relocating their investments to more affordable cities like Perth and Brisbane. This exodus of investors has further reduced the number of rental properties available in Melbourne, exacerbating the rental crisis.


The rental shortage in Melbourne is the result of a complex interplay of factors, including a surge in population, retreat of property investors, higher interest rates, overly strict rental standards, increased land tax, and investors selling out. Addressing these issues requires a multifaceted approach, balancing the needs of renters, landlords, and the broader housing market.


Can Rental Search Agents help you find a Rental Property Faster?

If you have the time and resource to search and review all rental properties, and attend inspections, rental agents cannot help you find properties any faster. But if you do not have sufficient resources or time to access and review all available rental properties, a good and resourceful rental search agent can help you significantly shorten the search and professionally manage the property manager and landlord, improving the attractiveness of your rental application. Our rental search service has a success rate of 99.8%.


What can I do if I do not have a Rental History?

If you are a new renter or new migrant into this country, property managers do not expect you to provide any past rental reference or referees. This is only logical. However, if you have prior rental history in other countries, you can provide them. Chances are, the agent are unlikely to contact your foreign landlord or former agents, but it shows you are opened to have your rental history checked. You can also provide character reference from your colleagues or friends, if you do not have any rental history at all.


Is Bidding for Rental Allowed in Melbourne and Victoria?

Bidding for Rental Properties is illegal in Melbourne and Victoria. If the agents have asked you to bid or better your offer for a rental property, you can report the agent to the Victorian Consumer Affairs.


What are some Pro-Tips and Advice to Beat the rental crisis?

Our property advocates have been asked by many new migrants about the rental crisis in Melbourne, many seeking for tips and advice to beat the rental crisis, We have compiled a comprehensive guide to help you beat the rental crisis in Melbourne.


1. Expand Your Search Area

Keywords: affordable rental options, Melbourne suburbs, regional areas

Now, looking at a typical 2 bedroom rental unit or apartment in Melbourne, rental prices can range from $400 to over $800 per week. Naturally, the closer the property is to the city and major amenities, the higher the cost. Vacancy rates vary significantly, from as low as 0.2% to over 3%. While it’s tempting to focus on your preferred suburb, broadening your search to nearby areas can reveal more affordable rental options. Consider exploring suburbs a bit further from the city center. Additionally, if you have the flexibility, looking into regional areas around Melbourne might offer more reasonable rents and a higher quality of life.


2. Utilize Rental Platforms and Tools

Keywords: rental websites, Domain, Realestate.com.au, rental alerts

To maximize your chances of finding a rental, use multiple rental websites like Domain, Realestate.com.au, and Rent.com.au. These platforms offer extensive listings and allow you to set up alerts for new properties that match your criteria. This way, you can be among the first to know when a suitable property becomes available. A word of caution though, these are popular listing boards, and there could be many watchers for new rental properties that become available. So, competition for your preferred rental properties can be high.


3. Network and Use Social Media

Keywords: local Facebook groups, community groups, rental listings

Networking can be a powerful tool in your rental search. Let friends, family, and colleagues know you’re looking for a place. They might have insider knowledge of available rentals. Additionally, join local Facebook groups and community groups where members often post rental listings and opportunities.


4. Consider Shared Accommodation

Keywords: house-sharing, Flatmates.com.au, co-living spaces

Sharing a rental property with roommates can significantly reduce your individual costs. Websites like Flatmates.com.au can help you find shared accommodation options. Co-living houses are also gaining popularity, offering a community living experience at a lower cost.


5. Be Prepared and Act Fast

Keywords: rental documentation, inspection readiness, quick application

Now, because everyone is relying on the same public websites for new rental properties, there could be hundreds of watchers for new rental properties. So, you need to be prepared to act fast. Having all your necessary documents ready can give you a competitive edge. Ensure you have your ID, proof of income, and references prepared. When a suitable property becomes available, be ready to inspect and apply quickly, as good rentals are often snapped up fast. It may not usually get you ahead of the rental queue, but it will show the agent that you are prepared.


6. Negotiate Lease Terms

Keywords: rent negotiation, longer lease agreements, rental incentives

If you are new to the rental market, skip this, and proceed to the next point. For people who are renewing their leases, don’t be afraid to negotiate the rent, especially if you have been a good tenant, always on time with paying the rent, and looking after the property, consider offering a longer lease agreement, as some landlords might lower the rent in exchange for the security of a long-term tenant.


7. Consider Alternative Living Arrangements

Keywords: co-living spaces, temporary accommodation, short-term rentals

If securing a long-term rental proves difficult, consider alternative living arrangements. Co-living spaces offer a community feel at a lower cost. Temporary solutions, such as short-term rentals or staying with friends and family, might be necessary while you continue your search.


8. Improve Your Rental Application

Keywords: rental resume, higher bond offer, strong application

Creating a rental resume with detailed information about your employment, rental history, and references can make your application stand out. Offering a higher bond can also make your application more appealing to landlords.


9. Stay Informed

Keywords: rental market trends, rental workshops, market analysis

Keeping up with rental market trends can help you make informed decisions. Attend rental workshops and seminars that provide insights into the current market conditions and offer valuable tips on securing a rental.


10. Work with a Rental Agent

Keywords: rental agent, property search, application assistance

If you do not have the time to keep searching and running around for inspections, hiring a rental search agent can be a worthwhile investment. Rental Search Agents can help you find properties that meet your criteria and assist with the application process, professionally liaise with the landlord or property managers and increasing your chances of securing a rental.


Conclusion

The rental crisis in Melbourne can be challenging, but by using these strategies and resources, you can improve your chances of finding a suitable and affordable rental property. From expanding your search area and utilizing rental platforms to seeking professional assistance from Concierge Buyers Advocates, there are many ways to navigate and potentially overcome the rental crisis. Stay proactive, be prepared, and make use of all available resources to secure your next home in Melbourne.




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