‘Tough' call as rents fall in 129 Melbourne suburbs

Rents in Melbourne have jumped $7800 a year since 2019, but wages have barely budged, and the result is a growing affordability crisis that's locking out even middle-income earners.
New figures from PropTrack reveal rental affordability has plunged to its worst level since records began, with typical households now able to afford just 36 per cent of advertised rentals nationally.
In Melbourne, the situation is less dire than in other capitals, but far from comfortable.
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PropTrack senior economist Anne Flaherty said Victoria remained the most affordable state for renters, but 'renters are still doing it tough'.
'Compared to five years ago, the average renter in Greater Melbourne is now paying about $7800 more annually,' Ms Flaherty said.
'And nationally, the share of affordable rentals for typical income households has dropped to record lows.'
RENTS FALLING: CHANGES IN EACH SUBURB REVEALED
The squeeze is hitting younger renters hardest, with just 19 per cent of listings affordable to households aged 15-24.
For low-income earners on $70,000, that figure plummets to just 2 per cent.
Ms Flaherty said more young people were staying at longer.
'It's not because they want to but because they simply can't afford to leave,' she said.
Even as 126 Melbourne suburbs recorded rent price falls and 227 were frozen in the three months to May, renters have yet to feel any meaningful relief.
Falling suburbs include a mix of outer and middle-ring areas such as Doncaster East, Cranbourne, Hillside, and Tarneit, but rent values remain elevated due to tight supply.
Jellis Craig North director Greg Cusack said inspections were still attracting queues, with renters going to increasing lengths to stand out.
'At most opens, we're seeing people line up before the agent arrives,' Mr Cusack said.
'Some are dressing up, striking up conversations, trying to make an impression.
It's not just about submitting an application anymore, it's about winning the property.'
Mr Cusack said many renters were being pushed out of traditional inner-city hubs like Fitzroy and Northcote and were heading further north to suburbs such as Glenroy, Oak Park and Reservoir for better value and said group applications for share houses were surging, as renters tried to reduce costs.
'We're seeing three or four friends band together for houses they wouldn't consider solo — it's becoming the norm, not the backup plan,' he said.
Ms Flaherty said while investor activity was picking up and rental growth had slowed, the pressure on tenants wouldn't disappear overnight.
'I do think we've passed the peak of the rental crisis,' she said.
'But unless we dramatically boost housing construction, affordability will stay stretched.'
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david.bonaddio@news.com.au

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Perth Now

10 hours ago

• Perth Now

‘Liberation Day' drives Aussie investor exodus

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News.com.au

14 hours ago

• News.com.au

How you could get $20,000 back in your tax

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Sky News AU

a day ago

• Sky News AU

Price wars, cheap airfares and stiff competition for Qantas: What can Aussies expect from the new Virgin Australia?

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'That will help Virgin relaunch to Asia, relaunch the United States and become a true international airline in its own right.' However, not all are convinced Qatar's involvement with Virgin will send it skyrocketing. Morningstar analyst Angus Hewitt, who has argued Virgin's IPO is overvalued, said the collaboration with Qatar 'does not mean much at all'. He noted Virgin will get some commission and a fixed fee from Qatar, but this would be offset by the cost of selling and delivering the flights. 'The actual earnings impact of the Qatar long haul agreement is going to be negligible,' Mr Hewitt said on Sky News' Business Now. The major value of the agreement, Mr Hewitt argued, came from the boost to Virgin's frequent flyer program Velocity. 'It makes Velocity a more formidable competitor to Qantas Frequent Flyer,' he said. Cheaper airfares? Aussie travellers have been desperate for cheaper domestic and international flights since the pandemic. But whether travellers see Virgin wage a price war with Qantas after it goes public remains up in the air. Virgin's decline throughout the 2010s and subsequent collapse in 2020 was partly due to the airline's former CEO John Borghetti toughing it out against ex-Qantas boss Alan Joyce in a bitter capacity war. A vast oversupply of seats contributed to the carrier facing a decade of red ink across its financial reports and the battle soon came to a halt. The Australian Travel Industry Association's (ATIA) CEO Dean Long told the days of nosediving airfares were long behind us. 'I would love to see a price war, but I think it's highly unlikely,' Mr Long said. 'What both companies have said is that they're comfortable in the marketplace that they're currently playing and I think that means it won't be a market share battle like we saw in the Borghetti-era where he tried to take Virgin to Qantas.' Mr Turner was hopeful for heightened competition between the airlines but noted Australians continued to see stable capacity levels despite the fall of short-lived budget carrier Bonza last year and Rex withdrawing from inter-city routes. 'As more capacity comes on, we think the airfares will tend to become more competitive,' he said. Mr Thomas was adamant Virgin going public will pose 'serious competition' for Qantas, but the Flying Kangaroo's Project Sunrise plans, where it will fly directly from Australia's east coast to London and New York, puts it ahead of Virgin. 'It'll be competition, but it'll be healthy competition and I think it would just help to grow the market,' he said. Qantas in March once again postponed the start of Project Sunrise to 2027, delaying the start time for when the National Carrier's on-order A350-1000 jets will operate the 20-hour flights. It follows the start date being delayed in early 2024 as the flights were initially slate to kick off in 2025. Virgin's share price Every company strives for profit whether they are public or private, but the presence of shareholders and the pressure to push up a share price can weigh on a business. Qantas' share price more than doubled since October 2023 but its value took a 28 per cent whack in the preceding three months when the mountain of reputational scandals rained hell on the carrier. The National Carrier illegally sacking staff and fraudulent sales practices, all while posting a record profit in the 2023 financial year, caught up with the airline and its shareholders. Mr Thomas said the Virgin executives should keep Qantas' tumultuous behaviour both during and after the pandemic in mind as it undergoes its revamp. 'Where Qantas probably got too entrenched in shareholder value and less about consumer concern, I think will be a very valuable lesson for Virgin,' he said. Travel industry figures are hoping Virgin going public could spark a positive change as it looks to deliver long-term profitability. Mr Long said the team at ATIA wanted the carrier to shift from a private equity mindset towards an attitude where it has to generate a solid return to bolster shareholder value. 'We're hopeful that as it becomes listed there should be some improvements in fleet and some improvements on some of the ground product and how they work with corporate Australia,' he said. The Flight Centre boss also stressed the carrier will need to deliver a 'very competitive' product compared to Qantas to ensure its share price can thrive. 'I think most executive teams and Virgin's, I'm sure knowing them, realise that service standards have to come up to a certain level and so that's important for the share price as much as the profitability,' Mr Turner said. But Virgin may not only have Qantas to worry about as it seeks to drive its stock price. This is a point Morningstar analyst Angus Hewitt makes in his company's report where the financial services firm argues Virgin's value is $2.60 rather than the $2.90 IPO. 'We don't think there will be only two airlines in Australia forever,' Mr Hewitt said. 'We think Australian airlines are over earning at the moment, and we expect this to attract competition in the medium.' Virgin and Qantas' domination of the domestic aviation space comes after Bonza and Rex both collapsed in 2024. Rex's demise is heavily attributed to its attempt to swoop in on the 'Golden Triangle' routes of Sydney-Brisbane-Melbourne after it purchased B737s off Virgin when it collapsed in 2020. Ruthless anti-competitive behaviour by the major players and an inability to secure slots at better times at Sydney Airport led the company to burn cash just to stay in the skies and ultimately withdraw from the ASX. As to whether Virgin meets a similar fate will be something Australians cautiously watch.