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Key points
- While rents fell in Hepburn, they rose in larger regional cities like Ballarat, Bendigo and Geelong.
- The return of seasonal workers to areas like Swan Hill has pushed rents higher over the past year, Domain data shows.
- Experts say tight vacancy rates will keep regional Victoria’s rents rising in the short term.
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Only one regional Victorian local government area has recorded a fall in rents over the past year, while all others either held steady or rose.
But the once booming pace of rent rises has slowed as city workers are called back to their offices instead of working remotely from their temporary tree-change home, new data shows.
Hepburn was the only LGA where asking rents for houses fell over the year to September, by $10 a week, or 2.2 per cent, to $440, Domain’s latest Rent Report has revealed.
The central Victorian shire with easy access to Melbourne was previously running at double-digit rent growth, even after lockdowns ended.
Rents also held steady in the Alpine shire at $500 a week, and on the Bass Coast at $440 a week, other once-booming markets that used to record double-digit rent rises. Wangaratta and Wellington were both steady, while the popular Surf Coast, no longer skyrocketing, edged up just 1.6 per cent to $620 a week.
Now, the biggest jump in rents was in Swan Hill, where they flew by 21.9 per cent, or $70 a week, to $390 over the 12 months to September.
Rents were also up in larger regional cities like Shepparton (7.7 per cent), Greater Bendigo (7.1 per cent), Ballarat (4.6 per cent) and Greater Geelong (4.4 per cent).
That compared to Melbourne’s rental market, where house and unit rents rose by double figures over the year to September, setting fresh records.
Domain chief of research and economics Dr Nicola Powell said while Victoria’s regional rents are mostly rising, the pace of the growth is slowing since the days when a flood of tenants moved to country areas to escape COVID-19 lockdowns.
“It’s getting back to the growth we expected to see before the pandemic hit and a lot of people made a sea or tree change,” Powell said.
Hepburn, which includes Daylesford, was the only LGA where rents fell over the year to September.Credit: iStock
Vacancy rates were also improving for renters, though only slightly, as tenants originally from Melbourne were now moving back to the city.
The combined regional vacancy rate in Victoria was 0.8 per cent in the September quarter, just above the 0.7 per cent in September last year.
Even though it’s tough to find an available rental, some Melbourne residents are still looking to move to regional areas for a better lifestyle.
Chloe Cox, 30, and her partner Chas Hunter, 27, want to find a house in Daylesford to enjoy the country life.
Chloe Cox and Chas Hunter are looking for a rental in the Daylesford area.Credit: Justin McManus
Cox, who moved from the Sunshine Coast to Melbourne a year ago, said she misses being around nature.
“We’re really moving out so we have more space and more green around us … I do like Melbourne a lot, but I feel better when I’m away from the city,” she said.
For the past few months, the couple has been looking for a rental house in areas like Ballan, Trentham, Clunes and Barry’s Reef, around Daylesford, but are finding it difficult despite the slowing market.
In Daylesford, Stockdale and Leggo director David Wynack said the market had settled from the boom over the past few years.
The bottom end of the rental market – with rents between $350 and $450 a week – was now very popular given hospitality staff had returned and had been pushing median rents down.
“It’s still a hard market – we’ve always had a shortage of rental properties,” he said.
KPMG’s director of planning and infrastructure economics Terry Rawnsley said he expected rents in regional areas to rise in the short term, as the vacancy rate stays low.
“My overall general reflection is with supply still being a bit tight, rising rents will almost be the new norm for the next 12 to 18 months,” Rawnsley said.
In the medium term, there would be a patchwork of rises and falls across the regional market.
“It will be the local economies [job market] and the local property market dictating what the increases are,” he said.
Rawnsley said areas like Swan Hill were booming, even though the growth of rents was slowing overall, as workers returned to their seasonal jobs such as picking the fruit harvest.
Graeme Hayes, of Graeme Hayes Real Estate in Swan Hill and Kerang, agreed itinerant workers were coming into the area for seasonal work, while others were finding full-time work in local industries and could afford houses at higher rents, he said.
“There has been a lot of pressure on the better side of the rental market,” Hayes said. “The top end has held up very well.”
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