The vacancy rate in regional Victoria increased to 2.4 per cent in June from 2.3 per cent in May and has been trending upwards since March 2015. The median rent for houses was stable at $290 per week during the same period, while the median rent for units rose by 2.1 per cent to $245 per week.
Two of the three major regional centres experienced a 10 basis point contraction in the vacancy rate to 3.2 per cent for Ballarat and 2.8 per cent for Bendigo. The vacancy rate in the Geelong region increased to 3.2 per cent and has been around the 3.1-3.2 per cent range since February this year.
Over the month of June 2015, the vacancy rate in metro Melbourne decreased to 2.9 per cent from 3.0 per cent the previous month. Although the vacancy rate tightened, the median rent remained stable for both houses and units, at $400 per week and $390 per week respectively.
There was no change in vacant space in the inner and outer suburbs over June, while rental growth for units in both areas was also flat. Conversely, the median rent for houses in the inner suburbs grew by 3.7 per cent to $570 per week over the same period, while houses in the outer suburbs experienced rental growth of 2.5 per cent to $360 per week. The rental market in the outer suburbs continues to remain the tightest of the three major metro regions, with further contraction experienced in the outer areas excluding the Mornington Peninsula (down 10 basis points to 2.1 per cent in June).
The middle suburbs experienced a tightening in vacant space to 3.3 per cent over June from 3.5 per cent the previous month. The vacancy rate has been on the path to recovery over the past three months, having tracked significantly higher over the latter half of 2014 through to March 2015. The median rent increased for both houses and units, up 1.1 per cent to $400 per week and up 1.4 per cent to $370 per week respectively. Given the anticipated moderation in sales growth during winter, the property market should see a slight trade-off between rental and sales segments, which should favour demand for rental property over the coming months.