Let’s dive into the current market conditions and explore the growing trend of “rentvesting” in the west.

Steady Rental Market and Emerging Investment Trends in Melbourne’s Western Suburbs

The rental market in Melbourne’s western suburbs remains steady, although renters have become more cautious with their budgets, often only moving out when landlords decide to sell. Many landlords are choosing to sell their investment properties due to rising costs, interest rates, compliance expenses, and land taxes. This has led to a decrease in the available rental stock, as most properties are being sold to owner-occupiers.

Despite the challenges in the market, our rental departments continue to boast strong listing numbers and a steady supply of rental properties. Over the past 12 months, rents have increased by around 10%, but they have now stabilised, with no significant price movement over the past few months. Application numbers remain steady, with an average of at least 10 applications per listing, and inspections continue to attract between 15-20 groups per property.

Market Conditions: Affordable Options in Demand

Properties renting for less than $500 per week, including smaller units, are snapped up quickly, often leasing within a week. However, higher-end listings are taking longer to rent. Our focus is on securing quality tenants for landlords, as we believe this leads to long-term benefits and market stability. We do not encourage prospective tenants to offer more rent than advertised to secure a tenancy, as this can lead to uncontrolled price increases and market instability.

The Rise of Rentvesting

An emerging trend in the western suburbs is "rentvesting," where younger individuals and professionals choose to invest in property while continuing to rent in areas they prefer to live. A recent example includes a buyer who purchased a one-bedroom apartment in Maidstone for $375,000, which is now fetching $450 per week in rent. They continue to rent in Yarraville for $1,000 per week, illustrating the growing trend of younger professionals, singles, and smaller families investing in properties while renting in different locations.

We expect this trend to continue to grow as more younger people recognise the benefits of property investment in the western suburbs while maintaining flexibility in their living arrangements. Suburbs like Sunshine, Albion, Ardeer, and Braybrook are becoming increasingly popular with both homebuyers and investors. These areas offer excellent transport links, road access, schools, and major amenities, making them prime locations for both residents and investors.

A Positive Outlook for Investors

Investors in the western suburbs are benefiting from capital growth and high demand for properties, with the region's affordability and infrastructure proving attractive. As the area continues to develop and gain popularity, we anticipate a growing number of opportunities for investors to capitalise on. The combination of steady rental returns and a positive outlook for capital growth makes the western suburbs an attractive option for both seasoned and new investors looking to secure long-term returns.