Melbourne rents soar to record highs in 2022

“It’s clearly a rental market,” Powell said.

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Rent increases have been particularly steep in central Melbourne, where apartment rents have risen 28.9 percent in one year to an average of $490 a week. Rents also rose in double digits in the inner east, by 14.1 percent and in the inner south by 12.8 percent.

Melbourne renter Emily Shoobridge spent six months Couchsurfing because she was struggling to find a home in a competitive environment.

She applied for rental accommodation for three months and only recently landed a lease in Melbourne’s CBD because she submitted her application immediately after an inspection attended by about 15 others.

She opted for a studio apartment, a compromise in terms of the type of home she wanted, but the 25-year-old hotel worker had no other choice.

“I obviously didn’t want to live in a studio,” Shoobridge said. “I once lived in a studio when I was 18 and in a student residence.

Emily Shoobridge just rented a studio apartment after six months of couchsurfing.

Emily Shoobridge just rented a studio apartment after six months of couchsurfing. Credit:Joe Armao

“My mental health took a turn for the worse when I moved there and I vowed never to move anywhere else.”

Shoobridge had spent half a year sleeping on friends’ floors and futons and decided she’d rather live on her own than join another shared apartment.

“I knew it was going to be damn tough,” she said.

“Many people have to settle for life situations that they don’t necessarily want, and that takes a toll.”

A studio apartment was not Shoobridge's first choice.

A studio apartment was not Shoobridge’s first choice. Credit:Joe Armao

Brendan Coates, program director for economic policy at the Grattan Institute, said Shoobridge is symbolic of a nationwide shift in housing demand. The pandemic caused Australians to value their own, larger space, he said.

This new trend meant more homes were being occupied, and when international borders reopened the market became much tighter than it was before the pandemic.

“It’ll probably get worse from here,” he said.

“A tight rental market means renters are spending more of their income to have a roof over their heads, which means they can’t spend as much money on essentials.

“We see rising homelessness rates with rising rents. That is the consequence.”

Coates said the crisis will deepen until a significant number of homes are built or made available for rent.

“Life is hard when you’re a tenant. Demand is rising sharply as migration faces static supply, so rents will continue to rise in the short term,” he said.

He said housing stress is also associated with poor health outcomes and developmental problems in children.

“There is evidence that housing stress has a long-term impact on your well-being,” he said. “When you are under financial stress, it affects your health.

“It has implications for the long-term development of children. There is stress in the home, they miss out on nutrition if they don’t have enough to eat, and they can miss out on educational opportunities.”

The chief economist at the Center for Independent Studies, Dr. Peter Tulip agreed that rising rents would make homelessness worse.

“It’s a very tight rental market and landlords can charge significantly higher rents and still fill their properties, so why wouldn’t they?” he said.

Tenants who are looking for a flat face tough competition.

Tenants who are looking for a flat face tough competition.

“The biggest single cause of homelessness is high rents… We’re seeing growing homelessness. It’s obviously not voluntary, people are being squeezed and left without an affordable alternative, and the result is homelessness.”

He said immigration has risen from near zero to quite high levels, reversing the trend seen at the start of the pandemic.

“[Rents] will rise steadily until we start building housing. Housing costs will only get more expensive until the policy changes.”

Tulip echoed the Grattan Institute’s concerns about the impact of high rents.

“One of the big implications for society is that higher housing costs are making Australia more unequal,” he said.

“High housing costs hurt low-income earners because they tend to be tenants, while benefiting the rich because they own the homes. This is a key factor driving inequality in Australia.”

https://www.smh.com.au/property/news/life-s-tough-if-you-re-a-renter-melbourne-rents-skyrocket-to-record-high-20230110-p5cbm4.html?ref=rss&utm_medium=rss&utm_source=rss_property Melbourne rents soar to record highs in 2022

Brian Lowry

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