Vacancy rate rises in Melbourne

By Your Mortgage

As first homebuyers move en masse into their new homes, they have left behind a growing number of vacant rental properties in Melbourne.

The latest figures show a significant rise in vacancy rate in both the outer and inner residential rings of the city, according to a report by the Real Estate Institute of Victoria (REIV). In the outer suburbs, the vacancy rate in April has gone from 1.1% last year to 1.8% this year. In the inner city (with 4 km of the CBD), it has gone from 0.3% to 1.3% over the same 12 months.

Overall, vacancy rate for Melbourne as a whole went from 1% to 1.3%, but the shift in the outlying suburbs were of significance, said REIV CEO Enzo Raimondo.

"(The increased vacancies) may be due to the number of first homebuyers that are moving from rented accommodation to their own home with the assistance of the grants, bonus and boosts," he said.

Considering the boost to the first homeowner grant by the government was recently marked for extension in the federal 2009 budget, the trend may continue on in the coming months.

"It is great news for renters if a by-product of the grants, bonus and boosts is an improvement in the availability of rental accommodation, however we will need to monitor the situation over the few months to see if it continues to improve," said Raimondo.

He went to say that the rental market would be in balance only when the vacancy rate reached 3%.