Victorian coastal cities the place rents have risen

“But we’re going to see this ongoing structural demand for people looking to move to the regions, particularly due to lifestyle appeal and an ageing population.”

On short-term leases, Bowman stated the connection with rising rents isn’t simple.

“I haven’t seen any very strong evidence of that relationship,” he stated. “Not all of those properties would necessarily be available on the long-term rental market, some are holiday homes, and if regulations changed, they may simply be left vacant rather than rented out.”

Bryan Hayden, director at Hayden Real Estate, who covers the Surf Coast, stated the area was experiencing a serious scarcity of rental properties.

“Rentals along the coast are in short supply, and it’s not getting any better,” Hayden stated. “The common price range now is $700 to $900 a week, driven purely through lack of supply.”

He attributed the scarcity to rising improvement prices, planning controls and regulatory delays.

“No developer will apply for rezoning because of the 50 per cent windfall tax… plus you’ve got development taxes, permit delays, overlays and stamp duty issues,” he stated.

“The rental problem can only be solved with private enterprise input, and private enterprise won’t go near it while they’re subject to so many draconian taxes and brick walls to climb over,” he stated.

Hayden stated demand was coming from each locals and folks relocating from Melbourne and Ballarat, with youthful residents more and more priced out of their residence cities.

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KPMG director of planning and infrastructure economics Terry Rawnsley stated rising rents mirrored ongoing inhabitants development and worsening affordability in bigger regional hubs.

“There’s a ripple effect happening,” Rawnsley stated. “In the past, you might have been able to afford to live in Geelong – now, prices are so high there you might be looking to move to Colac.”

He stated inhabitants shifts may have affected hire costs in smaller communities.

“There might be a town of 5000 or a local government area of 20 or 30,000 so even 50 or 100 additional people coming into the area is enough to shift the dial on the local rents,” he stated.

Rawnsley stated provide constraints had been constructing for years.

“Before COVID, some regional towns had stagnant populations, and there wasn’t a strong developer market building new homes,” he stated. “Existing surplus stock has been soaked up, but new supply hasn’t kept pace with demand.”

Competition for leases has intensified sharply, in response to Brooke West, enterprise improvement supervisor at Ray White Warrnambool.

“In December alone, we had 626 inquiries for our rental properties,” West stated. “There’s usually about 50 which go online in Warrnambool, inclusive of Port Fairy, Koroit and surrounds.”

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She stated demand was being pushed by staff relocating to the area.

“You’ve got people moving here to study at Deakin, people moving here to work at the hospital, engineers, wind farming, school teaching,” West stated.

West stated each short-term company renters and long-term tenants have been competing for restricted inventory.

“We have a lot of companies that will look to rent a space for their employers that are working here and contracted,” she stated. “We’re also seeing a lot of single professionals or couples moving from Melbourne and all over Australia.”

Bowman expects rents to proceed rising “modestly” in regional Victoria.

“But affordability limits will continue to cap the extent to which landlords can increase those rents,” Bowman stated.