Melbourne renters have been gifted their best chance to buy a home in years.
But they could have as little as 12 months to make the most of it before a perfect storm of government policy and falling new home construction drives rents up.
Last year, the city’s units had a $12.5 rise (2.6 per cent) in weekly rental costs — the smallest figure since 2015, according to CoreLogic’s Quarterly Rental Review for March.
CoreLogic data analyst Cameron Kusher tipped a maximum $15 potential rise for a $450 a week median unit this year.
“From a tenant’s perspective, you are seeing your rents going up, but you have a better bargaining position than you have had in some time,” Mr Kusher said.
“With a lot of new supply coming online, if you are willing to move you might actually be able to get a better deal in the market.
“Some of the more astute first-home buyers would be looking at this and saying ‘I can negotiate a cheaper rent, save up a bigger deposit and come back to the market once it’s increasing again and buy a better first home sometime in the future’.”
But their time might be limited, according to realestate.com.au chief economist Nerida Conisbee.
The supply of new apartments being built in Melbourne will soon slow as a result of falling development approvals. Federal Labor plans to restrict negative gearing next year if it wins the upcoming election, which could also create a shortfall in rental homes, with some predictions it could cause investors to turn their back on residential homes.
“But for apartment renters, now would be a great chance.”
Ms Conisbee warned strong population growth meant renters were unlikely to negotiate a better deal in suburbs like Abbotsford or Richmond — which had some of the highest rental demand in Australia.
But apartments in Southbank, Carlton, Docklands and Melbourne’s CBD, as well as townhouses and units in Macleod, were likely to see landlord’s “looking for tenants quite aggressively” opening the door for a better deal.