This is a far cry from six months ago, when there were reports of tenants offering rents 20 per cent higher than what was being asked, in an attempt to secure a property.
“The mania in the market has certainly died down,” said one bayside property manager who didn’t want her name disclosed. “The rental market is still buoyant, but a combination of several factors recently has given some excited landlords a reality check.”
These “factors” include an increase in the number of new apartments that have popped up in the city and suburbs, adding much needed supply to the market.
At the same time, more tenants than first anticipated upped from the overheated inner-city market, setting up house one or two suburbs further out (or to the other side of the city) where rents are more affordable and a deposit can be saved. This has eased demand.
Property managers say most Melbourne landlords raised rents two to three times since the start of last year, with the biggest rises reported in the June quarter.
“I’m advising my landlords to consider any more rent rises carefully,” said one manager. “The supply of new stock is only going to increase over the next few years, and if the market returns to an oversupplied situation, the landlord’s relationship with the tenant may come to bear.”