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Leasing Market View

What’s Covid-19 really doing to the rental market in Melbourne?

Written by Elishah Lusi
It has been an interesting time for Melbourne’s leasing market over the past quarter with the vacancy rate steadily climbing. With the rapid decline of international travellers, students, holiday makers and now even residents of other states, we noticed a large influx of short stay fully furnished apartments and homes hit the long-term rental market.

For the first time in years, we have a demand issue, the oversupply of stock, particularly in the apartment and inner-city areas, has pushed the rental values downwards and this has come as a bit of a shock to many Landlords. Whilst this has now likely levelled, we noticed long term tenants giving notice after living in their home for many years and hitting the market to upgrade their home, a property that may have previously been out of there price range was now suddenly available to them at a discounted price.

When the first round of restrictions eased, after a slow start there was a strong increase in available properties and despite the difficult conditions, we leased all of the stock we had on the market and in particular saw a strong uplift in lease deals in June and July! A fantastic result for many Landlords who having had to adjust to the conditions, found quality tenants to lease their property. With the second lockdown in Melbourne, there was a much milder quiet period to begin with whilst people adjusted to the restrictions once again, over the past two weeks however we have seen a far more significant enquiry level with Tenants making private appointments and Leasing at a steady pace.

Our team was busy taking people through by private appointments prior to stage four as we are no longer able to carry out open for inspections under the new restrictions. According to engagement with 3D tours have increased by a whopping 315%! Buyer views have increased by 26% and rental views have increased by 12% from this time last year. We are pleased we adapted to the virtual tour technology early into the first lockdown and it has been really well received. Domain are reporting that Sale enquiries for June are up 52% year on year and rental enquiries up 61% year on year! These figures tell us that while people are not out as much at the moment, they are considering moving and spending time looking at property. When the right one is available, they are ready to buy and lease!

With the recent data showing a significant increase in views, it looks to be a positive market ahead and we are looking forward to Spring and what that will hold for property.

Either way, it will pay to be proactive and respond to the market as we have always done.

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