The vacancy rate in March was 1.7 per cent, down from 2.3 per cent in December 2010. The last time the market was in balance was in January 2005, when a vacancy rate of 3.3 per cent was recorded.
From a geographical perspective, the low level of vacancies was consistent across the city. The inner suburbs recorded a 1.6 per cent vacancy rate, same as December; the middle suburbs recorded 1.8 per cent down from 3.1 per cent in December; and the outer 1.9 per cent, up from 1.1 per cent.
The rental vacancy rate for regional Victoria was 1.4 per cent compared to 0.9 per cent in December 2010.
Rental homes remain in short supply in each of the main regional centres, with Geelong recording a rate of 1.6 per cent compared to 1.4 per cent in December; Bendigo had 0.9 per cent of homes vacant compared to 0.7 per cent three months ago; and Ballarat was 1.4 per cent compared to 0.7 per cent in December.
While the vacancy rate remains below three per cent, renters are likely to face higher rents due to supply shortages and higher competition. This is demonstrated by reviewing the rental market over the past decade.
According to the Victorian Government’s Office of Housing, over the past five years, when the vacancy rate has been very low, the median rent for a three-bedroom house increased by 43.5 per cent, compared to 21.1 per cent between 2000 and 2005 when it was generally above three per cent. The median rent for a two-bedroom unit has increased by 54.5 per cent, compared to 25.7 per cent between 2000 and 2005.
Source: The REIV