Australian Property News

Melbourne investments become hot property

Posted on Thursday, March 03 2011 at 3:29 PM

Investors who own homes in Melbourne may find their properties are in high demand, according to the Real Estate Institute of Victoria (REIV).

Its latest figures show the Melbourne vacancy rate for residential properties has now been below three per cent for six years.

REIV chief executive officer Enzo Raimondo says in January, the vacancy rate was just two per cent.

"While the vacancy rate remains below three per cent, renters are likely to face higher rents due to supply shortages and higher competition," Raimondo says.

"In the past five years, according to the Victorian Government's Office of Housing, the median rent for a three-bedroom house has increased by 43.5 per cent, compared to 21.1 per cent between 2000 and 2005. The median rent for a two-bedroom unit has increased by 54.5 per cent, compared to 25.7 per cent between 2000 and 2005.

"For the rental market the only solution is to build more homes, which investors can then make available for the rental market."

REIV figures show the area with the fewest vacancies in Melbourne during January was the outer suburbs, where the vacancy rate was 1.4 per cent. The inner suburbs – those within 10 kilometres of the CBD – recorded 1.9 per cent, and the middle suburbs recorded a vacancy rate of 2.3 per cent, down from the 3.1 per cent recorded in December.