Melbourne’s rental property market is expected to fire up this year and inner city unit and apartment landlords are expected to reap the biggest financial rewards.
Unfortunately for renters though, this means greater rent hikes and increased competition for quality properties throughout Melbourne in 2011.
The latest RP Data Rental Review found Melbourne units have been outperforming houses for five years and the trend looks set to continue well into 2011.
The median rental rate for a Melbourne house grew by 2.9% in the December 2010 quarter and by the same amount over the year as a whole. Melbourne unit or apartment rents increased 1.4% for the quarter and a strong 6.1% jump on an annual basis.
Perhaps most impressive, over a five-year period, median asking prices have risen 52.2% for Melbourne units, compared to 41.2% for houses.
Looking ahead, RP Data analyst Cameron Kusher predicts capital city growth rates should this year return to the highs (approximately seven percent) seen over the past five years. Furthermore, the “inner city unit markets and outer more affordable housing markets” are predicted to be the star performers.
Mr Kusher says “vacancy rates remain tight in the capital cities, first home buyers remain relatively inactive, interest rates are at higher levels and new supply coming on-line is quite constrained”, all pointing to a strong rental market in 2011.