I have an email alert for rental properties in my neighbourhood. Each day I get sent a listing of all the available apartments that fit within my ceiling price. I usually get a list of several places nearby within my budget.
In the past few weeks, however, the only thing available is a car park rental. Ouch! I live in Southbank, a short skip away from the CBD.
Rental properties are in short supply across Melbourne.
Rent in Southbank has soared. In January 2023, the average apartment in Southbank cost 40 per cent more to rent than a year ago, according to SQM Research.
During the pandemic, rental costs dropped due to a lack of international students and visitors from overseas. I moved in to Southbank in May 2021 and was able to enjoy everything this beautiful part of town has to offer: the NGV, the Royal Botanic Gardens and South Melbourne Market.
The average weekly rent in Southbank in January 2022 was $450. One year later, it was $628 per week. It is now even higher than pre-COVID levels, where it hovered at just over $600 per week at the start of 2020. Reading this data, I feel a huge knot in my stomach and an acidic taste trailing down my throat. Hello, hyperacidity and acid reflux. Hello, anxiety!
My biggest expense each month is rent for my apartment. While I do love my neighbourhood and my dear neighbours, I am afraid I won’t be able to afford to live here when my lease ends in November. I’d like to be optimistic that the rental prices would go down in a few months. But that’s highly unlikely. The other option is for me to earn 40 per cent more, which is easier said than done.
I’m sure I’m not alone in dealing with rent anxiety. Many renters are in the same boat. In late January, a friend frantically posted on a community group asking if anyone had leads for a one- or two-bedroom apartment in the Southbank area.
Her exact words read: “It’s a shitshow trying to find a rental for my daughter with an extremely healthy bank balance and rental guarantee from us her parents. She will essentially be homeless in a week. She has been applying since November, no luck.”
A neighbour in his 60s recently moved to Richmond as he could no longer afford the rent increase in his Southbank apartment.
It is surely governed by supply and demand. With the return of international students and people moving back to Melbourne’s CBD, there is a growth in the demand. Question is: is the growth in supply able to keep up with the demand?
For renters like me, it is also a shock to the system. In October 2020, Southbank had its highest vacancy rate since 2009 of 19.2 per cent. The vacancy rate in January 2023 was only 1.4 per cent.
According to Consumer Affairs Victoria, rental providers are not allowed to increase the rent during a fixed term agreement. The rental provider must tell the tenant in writing that they are going to put the rent up at least 60 days in advance.
As I go on frequent walks in my neighbourhood with my dog, I witness the changes around me. I spot a real estate company’s sign for an inspection, and there is a huge turnout. I see a packed lobby and lifts having to take several loads of passengers to view the apartment on offer. That was not the case when I was apartment hunting in 2021, it was just me and another couple inspecting the unit.
Another detail I notice are people arriving with their suitcases for Airbnb rentals. These short-term rentals and serviced apartments diminish the supply for the long-term rentals for residents.
I’d like to be optimistic that rental prices will go down by the time my lease ends. But being realistic, I should put my energy and attention instead into increasing my income. After years of counselling and therapy, I learnt that action is the antidote to anxiety. I cannot control the price of rentals in Southbank when my lease ends. But I can control my capacity to earn more through work, by writing, teaching workshops and offering online courses.
The most immediate action I will take is to unsubscribe from email alerts on rentals that fit my budget. But then again, this is Melbourne. I won’t be too quick on dismissing carparks. As we recently witnessed in the news, with such a high demand in real estate, even a St Kilda garage can be an enticing dwelling place.
Maida Pineda is a food and travel writer, author and has a Master of Arts in Gastronomy. Follow her on Twitter, Instagram and Facebook.
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