From 2014, a slew of new apartment buildings in Melbourne began breaking ground. Local city councils have been approving plans for new apartment blocks that created a wave of doomsayers that there will be an oversupply of stock. The forecast was that there will be more apartments than there will be potential tenants driving down the sale and rental prices. However, using the law of supply and demand, as long as there is an increase in demand for homes through population growth, this will absorb the supposed oversupply. It is more likely that people who move to Melbourne from overseas and interstate will initially want to live closer to the CBD before committing themselves to buying a house further out. Renting will be the first step.
Melbourne rental affected by increase in population
Earlier in 2018, statistics show that Melbourne is gaining its population rapidly with people from Australia choosing to relocate to Melbourne. Sydney is still the number one choice of immigrants perhaps because when one mentions Australia, Sydney is the most well-known and biggest city creating an impression of economic opportunity. However, with soaring rental costs in Sydney, and then Melbourne being the most liveable city 7 years in a row, Melbourne is poised to overtake Sydney’s population in 2030.
Melbourne apartment oversupply predictions reversed
It seems like the forecast of apartment glut in Melbourne will not be happening any time soon. Rental market remains tight and will only get tighter as more and more people get drawn to Melbourne. Inner city apartments are excellent options for those people who move to Melbourne for work as most companies will have their offices in the CBD, and it would be more convenient for people to have a reasonable amount of travel time to and from their offices to get home when the city is unknown. People do find the Melbourne rental market to be very competitive. If there is an oversupply, an rental inspection would not have a queue snaking around the property. At any inspection scheduled by the agents, there are always so many people in attendance, even on a weekday!
Melbourne rental still very competitive
In one of my recent inspections, I spoke with a man who told me his saga on finding a home to rent in Melbourne. I did not introduce my company to him but I wanted to know He said he has been inspecting rentals for 9 weeks. He’s inspected many houses in Melbourne and the few applications he sent in were rejected. He didn’t apply for all the houses he inspected because most of the houses were substandard to the photos published online. He is baffled why his applications were not desirable when he has an income of $140,000 and has good rental reference. He is looking for 3 bedroom houses that are listed for $750 per week rent. I believe that as he is single and in late 20’s/early 30’s, his applications are up against families who are viewed as more stable and more “responsible”.
Each rental applicant will have competition come in some or many forms. A single person will have to compete with families for a family sized home. A single person will have to compete with other single people who have a good income and rental reference for a one or two bedroom apartment. An applicant can provide a local Melbourne reference which can be viewed as being better than an interstate or overseas rental reference. A person who owns a property elsewhere may be viewed more favourably as well.
With more people moving to Melbourne and a supply glut that is most likely not going to happen, the competition will only get fiercer for people looking for rentals in Melbourne. It is baffling why a prediction of oversupply was even released in the first place. Australia is still one of the few first world countries that has remained favourable economic outlook. Add into the mix the promise of sunshine and beach, it will continue to be an migrant’s haven.
How Finders Keepers Rental Property Locators help you find your Melbourne rental
Where do we come in? We help you navigate though the rental process in Melbourne. By having us on your side, we will narrow down the areas that will suit your requirements and mostly, this is how to minimise the travel time between home and work. From that point, we will inspect properties personally and give you a report. You don’t need to worry about getting from one inspection to the next in a short period of time because we do that for you. We apply on your behalf so we eliminate the hassle. Our knowledge of the Melbourne rental process will lessen the anxiety involved in relocating to Melbourne.
