Can someone please explain to me how, in the light of the...

Can someone please explain to me how, in the light of the information below, property prices are supposed to drop 40%.

Cogent, reasoned arguments only please. No spittle-spraying, boggle-eyed, fanaticism please. If all you want is to see prices drop because you have messed your life up then don't bother responding. If you have logical reasoned reasons then I would love to hear them.


Rental vacancies in Melbourne

11-Apr-2008


REIV research has revealed that in February the rental vacancy rate in Melbourne dropped to 0.9 per cent. This is the first time on record it has been below 1 per cent.

This unprecedented vacancy rate demonstrates the urgency for governments to introduce measures to increase public and private investment in rental accommodation.

According to the Australian Bureau of Statistics in Victoria there are 447,074 dwellings being rented. This means that there are approximately 4020 residential properties currently vacant. Latest reports estimate that 1500 people a week are moving to Victoria, and this reflects the strain being placed on the residential rental market.

Within Melbourne the area with the lowest vacancy rate was the inner city, within 4km of the CBD where a mere 0.5 per cent of residential rental properties are vacant.

The situation throughout Victoria is similar. The vacancy rate in Geelong is 1.6 per cent, Bendigo’s is 2.3 per cent and Ballarat has only 1.1 per cent of residential properties vacant.

The REIV believes that the residential market is in a balanced state when vacancy rate is around 3 per cent. This represents a stable market, with choice for prospective tenants and rents that increase in-line with CPI. The current market conditions mean that prospective tenants have limited choice and rents are rising at faster rate than have historically been the case.

To address the imbalance in the residential rental market incentives, along with greater investment public housing, need to be introduced that encourage investors into the market in order to increase the number of properties that are available.

The Federal Government has taken a good first step with its subsidy for affordable rental properties and we would welcome the State Government introducing measures to complement the Federal initiatives.

Enzo Raimondo
CEO REIV