Rental prices across Australia continue to climb, with some cities reaching unprecedented levels. Yet, Melbourne’s rental market follows a distinctive trajectory. While the city is a key player in the national rental landscape, its pace of growth contrasts sharply with other capitals.
This unique dynamic raises important questions about affordability, demand, and broader market trends.
What sets Melbourne apart, and what does this mean for renters and landlords alike? A closer examination reveals both challenges and opportunities within the evolving landscape of one of Australia’s largest rental markets.
Melbourne’s Rental Market in Context
Melbourne’s rental landscape is unique in its slower growth trajectory. While other cities experience sharp increases in median rents, Melbourne retains a degree of affordability, offering a reprieve to some renters.
Slower Growth Compared to National Trends
Melbourne’s rental prices have risen, but not at the same pace as other Australian capitals. According to PropTrack, median advertised rents have climbed nationwide from $420 per week in 2019 to $620 in 2024, marking a 48% increase. Melbourne, however, has lagged behind this surge.
- Melbourne’s share of rentals priced below $530 grew to 29% by 2024.
- This figure surpasses its overall rental market share of 19%.
- In contrast, cities like Perth and Adelaide have seen a sharp decline in affordable rental options.
PropTrack analysts attribute Melbourne’s slower growth to its weaker property market compared to cities like Brisbane and Perth, where demand continues to outstrip supply.
Affordable Options Remain More Accessible
Unlike other cities, Melbourne has retained a higher proportion of affordable rentals. For example, Perth’s share of affordable rentals plummeted from 14% to just 3%, highlighting a stark contrast.
- Melbourne offers a significant proportion of rentals under $530 per week.
- The city’s comparatively weak house price growth has helped maintain affordability.
This trend provides some relief for renters, particularly those struggling in other capital cities where rental markets are more competitive.
A Closer Look At Housing Market Dynamics
The interplay between house prices and rental trends highlights the complexities of Melbourne’s property landscape. Compared to other cities, the slower growth in Melbourne creates unique opportunities for both renters and investors.
Comparing House Price Trends
The rental market often mirrors fluctuations in property values. Melbourne’s comparatively flat house price growth has played a pivotal role in moderating rent increases.
- CoreLogic’s data shows Melbourne home values down 3.2% year-on-year as of January 2025.
- Perth, however, recorded an 18.5% year-on-year increase, reflecting stronger market dynamics.
These figures underline the varying pressures faced by renters across Australian cities, with Melbourne standing out for its relative affordability.
Listing Volumes on the Rise
While rental prices are high, Melbourne’s rental listings have reached a 12-month peak. PropTrack senior data analyst Karen Dellow highlights January as the busiest period for rental activity.
An increase in listings offers more options for renters.
However, demand for affordable housing remains intense.
“Across most regions and capital cities, median weekly rents are at an all-time high, making it increasingly difficult for renters to find affordable homes,” Dellow noted.
This surge in listings provides a glimmer of hope for renters, but the persistent demand for affordable housing underscores the ongoing challenges in Melbourne’s competitive rental market.
Key Takeaways for Renters and Landlords
Melbourne’s rental market remains a mixed bag, with affordability offering a silver lining amid nationwide challenges. Renters may find some respite, while landlords face tempered but steady growth.
For renters
- Melbourne remains one of the more affordable capital cities despite rising rents.
- Increased listings in early 2025 may provide more options during the search for housing.
For landlords
- Slower rent growth in Melbourne may make it less profitable compared to other cities.
- However, consistent demand and lower vacancy rates provide stability in the market.
Overall, Melbourne’s rental market balances affordability and demand, presenting a relatively stable but evolving environment for both renters and landlords.
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