Asking rents for Melbourne CBD apartments have dropped by as much as 32.7 per cent since the onset of COVID-19 last year – the sharpest decline across the country – but the sector is poised for a strong recovery as tenants return to the city and the international border reopens, analysis by Domain shows.
Since March last year, rents have fallen by 31 per cent in Docklands, by 28.6 per cent in Southbank and by 28.3 per cent in inner-city Carlton, as the lockdowns prompted tenants to seek out larger homes outside the city and the lack of students drained demand.
Rental rates for Sydney CBD apartments have plummeted by 20 per cent since March last year, tumbling by 21.2 per cent in Haymarket and by 23.1 per cent in Chippendale.
However, the tide may have turned already for the Melbourne and Sydney apartment sectors, with rents rising by 3.2 per cent and 1.4 per cent respectively during the three months ending September – the first quarterly growth in more than a year, said Domain chief of research and economics Nicola Powell.
Rental rates for Melbourne apartments had also risen faster than houses which were flat during the same period.
“This is significant because with unit rents now rising faster than houses, it signals that the worst has passed for landlords,” said Dr Powell.
“We’re seeing renters in cities such as Sydney, Melbourne, Canberra and Brisbane start to consider apartment living as an option, shown by the unit rent increase, largely being driven by affordability, whether that’s people seeking a better deal or cities that have record high house rents become a strain on budgets.”