It’s no secret that the Covid-19 pandemic has taken a toll on all aspects of the real estate market. However, landlords have their own range of issues and have experienced a crossroads of choice between selling their property or dropping their rent costs.
Current market rates in Melbourne
The current median rent cost in Melbourne is now at an all-time low of $443 for all types of housing. The fall in some inner-city areas has been more than 20%.
On top of all of this, Melbourne also recorded the weakest rental growth of all capital cities with house rents only up by 1.6% and unit rents unchanged. Specific areas that have been affected by the price hit are Melbourne CBD, Docklands and Carlton with these suburbs crashing at approximately 23% in the last year.
The primary factor that has contributed to these price drops are the international travel restrictions.
Result of these Price Drops
The result of the above changes has led to some serious conversations and changes in thought processes for landlords. Essentially, landlords have reached a point where they have had to look at either dropping their rent to draw in new tenants or selling altogether.
It has been common for landlords to drop rental rates by $100-$150 per week for tenants, which can equate to a large sum over time.
Comparison to Other Capital Cities in Australia
It is important to note, that Melbourne is not alone in this challenge, as all capital cities in Australia have seen a decrease in the past year according to data. However, in comparison to Sydney dropping by 4.9%, the Melbourne inner-city drops of 20% in units are quite substantial.
How Meadows Property Group Can Help in Challenging Times
By educating our clients about how to navigate through this unique time, Meadows Property Group maintained an outstandingly low vacancy rate! This is showcased throughout our portfolio over the past 12 months. Meadows Property Group’s overall vacancy rate was below the average in the past year as property owners took on our advice on strategy, which resulted in an 80% vacancy rate within 4 weeks post lockdown.