Forex Investment

MELBOURNE’S tenants have been warned that rents could rise as the city’s vacancy rates hit a 25-year low.

Figures released yesterday by the Real Estate Institute of Victoria show rental vacancy rates are about 1.2 per cent and have not risen above 1.7 per cent for the past year.

REIV chief executive Enzo Raimondo said: “The last time we saw 12 consecutive months with a vacancy rate around 1.5 per cent was 1981, ‘82 and ‘83 when the vacancy rate ranged between 1 and 1.3 per cent.”

He said the squeeze was being felt throughout the city, where most renters lived.

Vacancy rates were as low as 1 per cent in the inner city.

A market is regarded as being well balanced between supply and demand when the vacancy rate is about 3 per cent, a level last seen in Melbourne in early 2005. Since then much of the oversupply from the apartment development boom has been absorbed.

The situation is not as dire in middle ring suburbs, such as Burwood, where the vacancy rate is 1.4 per cent. But it has dropped to 1.2 per cent in the outer suburbs.

“We urgently need to find ways to encourage more investment in the housing market,” Mr Raimondo said.

“If this tight market continues the upward pressure on rents will be very strong.”

Data from the Australian Bureau of Statistics shows rental growth of 2.7 per cent in Melbourne last year, about the same pace as inflation, but well above the 1.2 per cent growth in 2005.

AAP

MELBOURNE’S tenants have been warned that rents could rise as the city’s vacancy rates hit a 25-year low.

Figures released yesterday by the Real Estate Institute of Victoria show rental vacancy rates are about 1.2 per cent and have not risen above 1.7 per cent for the past year.

REIV chief executive Enzo Raimondo said: “The last time we saw 12 consecutive months with a vacancy rate around 1.5 per cent was 1981, ‘82 and ‘83 when the vacancy rate ranged between 1 and 1.3 per cent.”

He said the squeeze was being felt throughout the city, where most renters lived.

Vacancy rates were as low as 1 per cent in the inner city.

A market is regarded as being well balanced between supply and demand when the vacancy rate is about 3 per cent, a level last seen in Melbourne in early 2005. Since then much of the oversupply from the apartment development boom has been absorbed.

The situation is not as dire in middle ring suburbs, such as Burwood, where the vacancy rate is 1.4 per cent. But it has dropped to 1.2 per cent in the outer suburbs.

“We urgently need to find ways to encourage more investment in the housing market,” Mr Raimondo said.

“If this tight market continues the upward pressure on rents will be very strong.”

Data from the Australian Bureau of Statistics shows rental growth of 2.7 per cent in Melbourne last year, about the same pace as inflation, but well above the 1.2 per cent growth in 2005.

AAP