Apartment rents jump 10 pc in inner Melbourne

Asking rents for Melbourne’s inner-city apartments, such as those in the Docklands and Southbank, have jumped by more than 10 per cent in the past 12 months, pushed by demand from tenants priced out of the detached housing market, data from CoreLogic shows.

Rental growth was particularly strong during the December quarter, with Southbank apartments posting a 3.8 per cent rise in median rent to $454, while Docklands lifted by 3.7 per cent to $471, making them among the country’s fastest-growing rental markets.

“As arguably the most COVID-impacted unit market in Australia, Melbourne’s rental growth trends shifted in December, as units recorded the strongest rental growth in the country,” said Tim Lawless, CoreLogic’s research director.

“Inner-city Melbourne units rents fell by 24.2 per cent as high levels of unit supply met headlong with a rental demand shock as international borders closed and domestic demand swung towards lower density options. Since that time inner Melbourne units rents have rebounded by 8.5 per cent.”

The inclusion of so many suburbs across Melbourne’s inner-city precinct in the fastest-growing list reflected a significant turnaround in rental trends, he said.

West Melbourne also made it to the top-performing list, with median unit rent climbing by 3.6 per cent, and Melbourne city by 3.5 per cent, during the same period.

The solid showing came as the Melbourne unit market outperformed all other capitals, posting a 1.6 per cent rise in rents over the same period.

Rents in the Victorian capital remain 5.5 per cent below the record highs of July 2019, however.

“We could see growth momentum gathering some pace across inner Melbourne, as rents are still lower than pre-COVID-19 levels and demand is set to rise as foreign visitors and students add to the already strong domestic demand,” Mr Lawless said.

Unit rents rose 1.2 per cent in Canberra and 1 per cent in Sydney, while the rest of the capitals posted between 0.5 per cent and 0.8 per cent quarterly growth.

For houses, Sydney’s upper north shore and the eastern suburbs notched up the largest increases in asking rents during the December quarter, as demand for bigger family homes continued to rise.

East Lindfield was the country’s best-performing rental market for houses during the quarter, with rents surging 8.7 per cent, followed by Rose Bay with 7.8 per cent growth, and Lindfield with a 7.7 per cent increase.