Coronavirus: Massive Melbourne rent price drops as stock piles up

Rents are being slashed by up to $600 in Melbourne’s CBD and trendy inner suburbs, in what agents have branded a golden opportunity for tenants.

Lease lengths are being thrown out the window and landlords are even offering furniture to boot, as they grapple to fill empty properties.

The disappearance of international students and tourists is being blamed, as the city vacancy rate skyrocketed last month to heights not seen in more than 15 years.

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Harcourts Melbourne City director Dionne Wilson said the city was the “most affected” rental market and tenants had unprecedented power to negotiate on their terms.

She said some landlords were urged to commit to tenants “who just wanted three month leases”.

“A lot of short-term accommodation like boutique hotel rooms and AirBnbs have flooded the market,” Ms Wilson said.

“There’s excess stock which has made rent a lot more negotiable.”

Student buildings along Swanston and Flinders streets had some of the largest rent cuts, with some advertised on realestate.com.au 25 per cent cheaper than a year ago.

Luxe apartments have also seen dramatic price cuts, including one advertised property at Point Park Cres in Docklands that dropped its asking weekly rent from $1500 to $900.

Melbourne’s CBD vacancy rate spiked to 9.3 per cent in May, up from just 2.2 per cent a year ago, SQM research shows. It’s the worst result recorded by the data company in 15 years.

Collings Real Estate head of property management Caleb Pikoulas said some city rentals had reduced by as much as $250 in their weekly asking price.

He said it was a “great time for tenants to move” and secure a cheaper property.

“High-density apartment suburbs have really struggled in the past three months … Brunswick has so much stock at the moment and Richmond is the same,” Mr Pikoulas said.

“Two-bedroom apartments have also seriously suffered, with very little difference to what you would pay for a one-bedroom apartment now.”

First-time renters Riley Mayne, Damien Lee and Oliver Mullaney moved into their Hawthorn East apartment from Bundoora this month.

Mr Mayne said the group were able to move closer to the city, after finding rentals far cheaper than they expected.

“We were only going to look for a six-month contract, but once we assessed what we were paying we decided to lock it in for 12 months,” Mr Mayne said.

“We didn’t get turned down at any of the places we applied for.”

Realestate.com.au chief economist Nerida Conisbee said it could take the city’s rental market a long time to recover from the downturn, because of the “high degree of job loss” among young people, and a disappearance in international students and tourists.

But Melbourne’s outer suburbs were slowly beginning to recover, with vacancy rates remaining steady and renters returning to the market, she said.

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