Melbourne tenants who signed up for reduced rents in the city at the height of the pandemic are now being forced out of the CBD and inner suburbs, with some reporting rent increases of more than 30 per cent.
- Many low-priced leases are expiring, leaving tenants facing substantial rent increases.
- In Victoria, there are no limits on rent increases as long as they are in line with market value and are entered at the end of the lease.
- Housing advocates say it’s a tough time for renters to find affordable properties
People who normally would not have been able to afford to live in the CBD, Docklands or Southbank were able to secure rental apartments during 2020 and 2021 at significantly cheaper rent.
But some of those with expiring leases have been left struggling to find new homes as the downtown rental market recovers to pre-pandemic prices.
Lee Davis-Thalbourne and her partner Erin Kyan managed to secure a two-bedroom apartment in Docklands last year for $450 a week.
Her apartment was in a very accessible modern building, which was great for Erin, who needs to use a wheelchair.
Having had trouble climbing stairs in her previous rental, Erin said that living in an accessible place made a big difference to her health.
“I think the first month we lived in the new place, I realized I didn’t have as much pain and didn’t need as much physical therapy,” she said.
“It was much better for my freedom. I didn’t need someone to pull me out.
“I didn’t need my partner to help me get out of the house.”
When their 12-month lease came to an end, they were told their rent would increase by $140 a week to $590, a 31 percent increase.
Knowing that they had gotten a good deal when they moved in, they expected a raise. But they did not expect it to be so high.
While there are rules on rent increases in Victoria, there is no hard limit as long as it is in line with the market rate and presented with a notice at the end of a lease.
“I remember we were looking at him in shock,” Lee said.
“It would have meant that we would have had to give up the idea of having a house of our own.
“If we stayed, we were basically saying, ‘That’s it, owners, you win.'”
The couple have just moved to a new place in St Kilda.
City rent drops introduced a new demographic of renters
During the peak of the pandemic, thousands of vacancies in the city center generated competitive prices for tenants.
Data from the REA group shows that, at its lowest point, the average weekly rent fell 32% from pre-pandemic levels in the CBD, 28% in the Docklands and 27% in the Southbank.
“Even people who only had a JobSeeker income could afford to rent a property on their own in the city,” said Rachel Evans, who coordinates the private rental assistance program with Launch Housing.
That was the case for Ann, who requested that her real name not be used.
He has been unable to work while undergoing cancer treatment and moved into a one-bedroom apartment in the city last year for $290 a week.
“It was affordable and close to the hospital and stores and everything,” he said.
But she learned that her landlord was raising her rent to $400 a week, a 38 percent increase.
He also expected his rent to go up, but not by as much.
“I was shocked…there’s no way I can afford that,” he said.
It took Ann four months to find a new place in Melbourne’s northern suburbs, which she was able to do with the support of Launch Housing.
“I didn’t know I was moving. I didn’t have time to plan. So I didn’t have rent up front. I didn’t have bonds to pay for these things.”
“It was very stressful and it has a huge impact on your mental health.”
Increased demand as international and interstate residents return
The director of rentals at Lucas Real Estate in Docklands, Dylan Emmett, said even he was surprised by the surge in demand for rentals in the city during the normally slow winter.
“And as of now, our rents are, in some cases, the same as they were before COVID,” he said.
“And in most cases not very far.”
He said many international residents were returning, as were people who left for regional or interstate areas.
And he said landlords were having to deal with ever-increasing increases in interest rates on top of reduced rents during COVID.
“Although the rents are what they were, their costs are also higher,” he said.
Housing advocates said it was a difficult time for anyone looking for a rental as Launch Housing’s private rental assistance program supported hundreds of people trying to keep or establish a rental.
“People may have to apply for 100 properties before they’re actually accepted for anything,” Ms Evans said.
“Meanwhile, they are falling behind on their rent because they can’t keep up with the rent on their current property.
“The reason this is happening is that there is a lack of affordable rent.”