Emily Chapman Laing
An increasing number of Victorians are being smashed by the rental crisis, with new analysis revealing asking weekly rents have increased by more than $100 in some areas since interest rates started rising.
South East Melbourne has seen a 10 per cent hike in rental rates, with property averages rising $44 from $442 per week to $486 per week.
This comes as no surprise to the tenants of the region, 76.5 per cent of whom are steeped in financial housing stress.
Cranbourne property prices have risen steadily over the past five years, from a median price of $350 per week in March 2018, to a new median of $400 per week, according to property data from realestate.com.au.
In Clyde, properties have risen from a median price $380 per week in 2018 to $475 per week in 2023.
Berwick, Officer and Pakenham have seen an approximately $70 increase over the past five years.
Communities further from the city are feeling the pinch too, as Pearcedale properties have risen over $100 in price over the past five years.
In Botanic Ridge, residents are seeing approximately the same prices today as they experienced in 2018, with a median of $500 per week.
However, rental prices in this area have grown 19 per cent over the past 12 months, following a 2020 drop in housing costs that saw rentals with a median price of $370 per week.
Community Housing Industry Association (CHIA) Victoria has analysed Victoria’s top ten hotspots for rental increases since the RBA started lifting interest rates in May last year.
Inner East Melbourne tops the list with tenants paying $111 extra in rent per week since May – a 22.3 per cent increase.
Regional Victoria is also feeling the pinch, with renters in North East Victoria paying an extra $36 a week.
Vacancy rates across Victoria remain well below two per cent making it even harder for renters to find a home, much less one they can afford.
The analysis comes as CHIA Victoria launches its budget submission for the Victorian Government, which includes a call for $6 billion for a Social Housing Investment Fund to provide a long-term funding pipeline for social housing growth.
CHIA Victoria acting chief executive officer Jason Perdriau said as a matter of urgency, the Victorian Government must significantly top up its investments in social housing.
“A lack of affordable housing supply is a primary driver for soaring rents in Victoria,” he said.
“But the rise in interest rates isn’t helping right now.
“Landlords can pass on their financial pain to tenants.
“On top of this, higher interest rates are softening the demand for new housing construction.
“The most effective solution to create more housing supply for Victorians who need it most is by increasing the number of social and affordable houses.
“Now’s the perfect opportunity for the Victorian Government to commit to a $6 billion Social Housing Investment Fund as its historic Big Housing Build winds down, and more Victorians experience housing stress.
“Victoria has the lowest proportion of social housing in the country.
“Meanwhile, three areas within Melbourne are among Australia’s top ten regions with the highest number of households facing unmet need.
“An investment of $6 billion will deliver 20,000 social homes over the next decade – a third of what’s required to hit Infrastructure Victoria’s recommended target.
“This boost would make a huge difference to many Victorians who are doing it tough.”
