GEELONG’S government agency jobs boom is squeezing the city’s rental market.
Real Estate Institute of Victoria figures show just 1.6 per cent of rental homes in the Geelong region were vacant.
Local property managers say there are more renters than ever before, pointing to agencies like NDIS and WorkSafe drawing people to Geelong.
MORE READING: How to convert a shed into a luxury home
An REIV spokesperson said the number of rental bonds in the city had climbed 17 per cent since 2015.
Almost 23,000 people now rent in Greater Geelong, the government figures show.
Rising demand has emboldened landlords to increase rents, with REIV data showing a 4.2 per cent rise in 12 months to March. House prices climbed nearly 9 per cent at the same time.
The median rent for a two-bedroom house is $320 a week, for three bedrooms it’s $360 and $430 for four bedrooms.
Unit rents rose about 10 per cent.
“With a rate of 1.6 per cent, there are clearly not enough rental properties in Geelong,” the REIV spokesperson said.
“There is no doubt that Geelong’s booming economy and the influx of employment, particularly the migration of State Government departments, are among the factors that are keeping Geelong’s vacancy rate at these low levels.”
A Department of Health and Human Services Rental Report revealed the number of new rental lettings in Victoria fell 14.2 per cent to 12 months to March, lending to property investors dropped 24 per cent.
At the same time, affordability has slipped, with 15.5 per cent in Geelong below the 30 per cent of income threshold.
West End Real Estate director Gina Tobolov said more people were choosing to rent and were staying in one place for longer.
“There’s a lot of publicity in the media saying that people have to rent because they can’t get into the market. That’s true, but we also deal with a lot of people that choose to rent because they like that flexibility,” Ms Tobolov said.
Agents said new tenants were getting a feel for Geelong suburbs, especially around school zones and near train stations for families where one partner still worked in Melbourne.
The demand has meant crowds of 30 and even 50 groups waiting to view some homes.
High-demand suburbs included Belmont and Highton, where schools were the biggest factor, while big backyards created a rush for families in many inner-Geelong areas like East and South Geelong. Melbourne tenants were also keen character homes in Geelong West and Newtown.
But she said new suburbs like Armstrong Creek were oversupplied as investors built new houses.
“Last week there was 34 four-bedroom houses for lease in Armstrong Creek, which is really high,” she said.
Some even offered to pay a higher rent, or up to six months upfront, to secure a lease, Ms Tobolov said — a practice to be outlawed under recent changes to the Residential Tenancies Act.
“But we don’t take that into consideration, we still process every application in the same way and present them to the landlord,” Ms Tobolov said.
Hayeswinckle property manager Jess Scholer said it was hoped investors who chose to wait out the federal election and financial year would step in next month to bring more homes to rent.
Release Property Management director Renee Reynolds said some mum and dad investors had sold up at the height of the property market late last year.
“I think since the election, more properties are coming on for lease” she said.
“For anyone wanting to purchase a property to grow an asset, they’re quite confident now.”
Geelong house prices and rents
|Suburb||Median price||12m % change||Median rent||Rental yield|
|Bell Post Hill||$485,000||10.2%||$370||4.0%|
|St Albans Park||$450,000||15.4%||$370||4.3%|
Source: CoreLogic, Median house prices and rents, capital growth for 12 months to March, 2019