Melbourne Rental Market: Which Suburbs Are Thriving During COVID
Sea changers looking for a salty tang in the air have driven growth of more than 10% in areas surrounding the Melbourne rental market: specifically, the Mornington Peninsula and further southeast. In fact, beachside suburbs made up all 10 Melbourne suburbs with the highest increases in rent in 2020, according to CoreLogic data.
The number one position in the list was occupied by both Blairgowrie and Bonbeach. Their median weekly rental values increased by 10.8%: from $469 and $516 to $526 and $578, respectively.
Renting also became much pricier in the affluent suburb of Portsea (up 10.6 per cent to $736), Chelsea (10.2 per cent to $550), Sorrento (10.1 per cent to $609) and Rye (10 per cent to $486).
In the unit market, rents rose the most in Capel Sound, up 9.9 per cent to $381.
Hastings (up 9.1 per cent to $372), Mount Martha (8.8 per cent to $510) and Rosebud (7.6 per cent to $413) were also big movers.
The reasons for the drastic increase in rental property prices can be attributed to the increase in Melbournians working from home. With less motivation to live close to work in the CBD, it is evident that many Melbourne residents are seeking out blue horizons in new areas while working from home.
Also, it seems people are ‘trying before they buy’ to a greater extent than was happening pre-pandemic. Before selling their Melbourne properties, individuals and families who want to move to the Mornington Peninsula are exploring their options in the area. Part of the home buying process involves expensive agent fees and stamp duty. These are secondary factors that may have made renting away from home attractive during the pandemic. Many people are simply exploring their options to see if the area is a good permanent fit for them.
However, while the Mornington Peninsula is seeing a boom in its rental market, densely populated Melbourne suburbs are being decimated by the lack of students and international arrivals to the city. The Peninsula typically does not outperform Melbourne suburbs closer to the CBD, where a diverse range of individuals looking for real estate usually make the market very competitive. The contrast between falling rental price changes in Melbourne and increases in rental prices on the peninsula is clearly demonstrative of the drastic changes to the economy wrought by COVID-19.
Property Mavens chief executive, Miriam Sandkuhler, said that coastal towns within two and a half hour’s drive of Melbourne with good transport links and a diverse economic portfolio should be the most sought-after places to live.
If you’re looking to make the change to a seaside suburb, contact Pillar Financial for all financial advice in Melbourne. We are open for business from 9:00 to 5:00pm Monday to Friday. Call us today on 1300 730 309 to schedule a confidential discussion about your finances and your situation.