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Alesha Capone April 18, 2022

Melbourne inner city markets hardest hit by Covid-19 are the most in-demand with international homeseekers looking for a rental, in a positive sign for investors.

The number of foreign residents looking for a Victorian rental property increased 40 per cent in the March quarter compared to 12 months earlier, realestate.com.au figures show.

Melbourne, Docklands and Southbank — the worst affected property markets by the pandemic — are joined by Carlton as the most searched suburbs by offshore rental seekers.

The median unit rent in Melbourne postcode 3000 has risen 13 per cent year-on-year to $450, according to realestate.com.au, as demand returns post-lockdown.

The CBD rental vacancy rate — which hit 10.8 per cent in September 2020 — is now 2.4 per cent as of March, according to SQM Research.

PropTrack economist Angus Moore said opening the country’s borders had been “a big changer” for the rental market, “particularly so for the inner city rental market”, with international students, backpackers and skilled migrants seeking properties.

“Vacancy rates are now lower than they were pre-pandemic, and the number of inner Melbourne rentals listed on realestate.com.au is less than half what it was at its peak in November 2020,” Mr Moore said.

“That’s starting to translate into growing rents in inner Melbourne.”

New Zealand, India, the UK, the US, Hong Kong and China topped the list of overseas searchers for Victorian property rentals, according to realestate.com.au

SQM Research managing director Louis Christopher said there were 12,400 vacant rental properties in metropolitan Melbourne last month compared to 27,300 the same time last year.

Mr Christopher said this had been caused by multiple factors, including renters returning to the city from regional areas; some landlords withdrawing their properties from the market; and leaseholders being less willing to share with others for fear of catching Covid.

He believed it “likely homelessness will be increasing” as rental stock dried up.

International property website Juwai co-founder Daniel Ho said many of the 150,000 student visa holders stuck outside Australia during the pandemic could now return.

“They will add significant heat to rental markets in their most popular suburbs by the end of the year,” Mr Ho said.

Barry Plant Docklands property management associate director Steven Heaven said the amount of people seeking inner city rentals had “gone through the roof”.

“We did 52 lets in February, predominantly half of that would have been with the city stock with international students, people relocating from interstate and also people coming back from the regions,” he said.

Their office recorded 138 vacant rentals across Docklands and the CBD at the pandemic’s height but now only have about seven vacant leasable properties.

The same countries dominating the international rental list were the top nations searching for homes to buy in the state, with Melbourne, Richmond, Toorak, Glen Waverley and St Kilda among the hot spots.

It comes as the Foreign Investment Review Board’s annual report showed a 37.8 per cent decrease in the number of residential real estate proposal approvals year-on-year to 4384.

That national figure was worth $10.4bn.

Melbourne Lord Mayor Sally Capp said stamp duty concessions and exemptions on eligible properties meant the inner city had “never been more affordable” for buyers.

“The quality of real estate stock that is available in the city right now should be tempting buyers from all walks of life, from young professionals, savvy investors, to downsizers looking to revel in the buzz of Melbourne’s central entertainment district,” she said.

Top overseas searchers looking for properties to rent in Victoria

1. New Zealand

2. India

3. United Kingdom

4. United States

5. Hong Kong, special administrative region of China

6. China

7. Japan

8. Singapore

9. Malaysia

10. Indonesia

Top rental suburbs for overseas property seekers in Victoria

1. Melbourne 3000

2. Docklands 3008

3. Carlton 3053

4. Southbank 3006

5. South Yarra 3141

6. Clayton 3168

7. St Kilda 3182

8. Richmond 3121

9. Hawthorn 3122

10. Fitzroy 3065

Top overseas searchers for property purchasers in Victoria

1. United States

2. United Kingdom

3. New Zealand

4. Hong Kong, special administrative region of China

5. India

6. Singapore

7. China

8. Japan

9. Canada

10. Malaysia

Top suburbs for overseas property purchasers in Victoria

1. Melbourne 3000

2. Richmond 3121

3. Toorak 3142

4. Glen Waverley 3150

5. South Yarra 3141

6. Brighton 3186

7. St Kilda 3182

8. Point Cook 3030

9. Doncaster East 3109

10. Hawthorn 3122

Metropolitan Melbourne median rents January – March 2022

Houses – $450, up 2.3 per cent year on year

Units – $395, down 1.3 per cent year on year

Melbourne 3000 median rents January – March 2022

Units – $450, up per cent year on year

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