2022 Rental Market Update
In Melbourne, the vacancy rate is down 2 percentage points from the peak of December 2020 following the extended lockdown.
In the Melbourne CBD, the area worst hit by the pandemic where the vacancy rate almost reached 14 per cent last year, that’s now shrunk to 4.5 per cent.
The rental pool is starting to shrink, particularly for houses and I expect this to continue throughout 2022.
We have experienced first hand many Landlords selling their investment properties in 2021 following the introduction of the new 132 Victorian Government tenancy laws which came into place in March 2021. Much of the rental stock is being purchased by owner occupiers , not investors which is contributing to the growing supply shortages.
Many renters have been living in shared households but seeing how much rents have fallen during Covid have now decided to move out and live on their own. This is also the case for families where during Covid many children moved back with mum and dad and are now seizing opportunity to move out and rent at lower cost than before.
On top of that, Expatriate Australians returned in large numbers during the final quarter of 2021, many of whom are now looking for suitable rental accommodation. In the coming months we will see the return of overseas students, backpackers and skilled migrants who will also seek rental accommodation , placing huge supply pressures on the rental housing market.
With house prices rising upwards of 20% in many capital cities the dream of owning your own home is getting out of reach of many young Australians , many of whom have now given up and resigned to being long term renters
All of this means one thing, as vacancy rates continue to fall, rentals are sure to rise in 2022
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