Melbourne vacancy rate drops to below 1%

Rental affordability in Melbourne is likely to decline further as the rental vacancy rate fell in February, for the first time, to below 1%.

According to Enzo Raimondo, CEO of Real Estate Institute of Victoria (REIV), the vacancy rate now stands at 0.9%, which means that, of the 447,074 rental homes in Melbourne, only around 4,020 are available for rent.

Suburbs within the 4km radius of the CBD were the worst affected, with just 0.50% of rental homes vacant.

"The fact is that inadequate supply of rental properties is pushing rents up," said Raimondo. "This is a serious concern, especially for people that are looking for suitable accommodation."

The supply and demand is said to be in balance when the vacancy rate is around 3%.

REIA noted in its report that with the Victorian median weekly income falling by 0.80% in the December quarter, home loan and rental affordability have also worsened. Victorian households now need about 36.2% of the family income to meet home loan repayments. The proportion of income needed to meet rental payments increased slightly, to 20.6% from 20.4%.

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