Cheapest rents at record highs

(Tom Rumble/Unsplash)

Liam McNally

Melbourne’s west is the cheapest rental market in any Australian city despite jumping 13.1 per cent in the last year, according to a new report from CoreLogic.

Median rent in the west Melbourne statistical area, which encapsulates the area from Footscray out to Little River and Bacchus Marsh, has reached an all-time-high of $491 per week.

Despite this, the area is the cheapest capital city area to rent in, and the eighth cheapest area in the country.

Most of the areas cheaper than the west were in remote west of Queensland, Victoria and NSW and in the north of South Australia.

CoreLogic Research Australia head Eliza Owen said the price jump in the west is due to a cascade effect with people being priced out of more expensive areas due to the wider rental crisis, as well as the area receiving a high portion of overseas migration to Australia.

“It is very concerning to see our cheapest rental markets see such high increases… a lot of the areas that were once thought of as affordable, have now lost that affordability status,” she said.

“For a lot of people, after the private rental market, that’s it. They start facing housing insecurity, they start facing homelessness.

“And part of that is because in the background of this rental market upswing, we’ve seen a gradual decline in investment in social housing over decades.”

The jump reflects nationwide rental market pressure, with 72 out of 88 statistical areas in the current at record-high median prices.

The national median rent rose 8.3 per cent, compared to an average annual increase of two per cent in the 2010s.

Ms Owen said she expects the rate of increase to slow down with some bumps in supply but not to stop.

“We basically need more dwelling supply, particularly in social and affordable housing, but the supply of dwellings takes time,” she said.

“I think you’ll get the demand side response sooner than the completion of adequate dwellings, and that’s going to look like more share-housing, people moving into cheaper areas… or it could mean more people in insecure housing, crashing on couches, experiencing homelessness.

“Renters tend to be on lower incomes. So for the lower income households, this is going to be a really testing time, and it’s a stressful time.”