As is often the case in circumstances like this, people have been inclined to lay “blame” on the shortage of rental properties and rising rents on a variety of possible causes, from the Government and international immigration to greedy landlords and others.

However, it’s important to understand that at the end of the day, the tightening rental market comes down to one simple economic equation above all others…supply versus demand.

The simple fact is that there is an increasing demand for rental accommodation, driven by a number of different factors. Most Victorians are aware of this trend. What many more Victorians are unaware of is that the supply of rental accommodation is decreasing at the same time that demand is increasing, and we saw some data this week which confirms just how serious this drop in supply has become.

In case you missed the article which appeared in the Herald-Sun on Saturday, March 23rd, research by Suburbtrends, a real estate analytics organisation, found that here in Victoria in the first two months of this year, a total of 8738 former rental properties were listed for sale. To put this in perspective, the number for the same two months in 2023 was 5811!

This figure suggests that more than 20 per cent of the properties listed for sale across the state in January and February were ex-rentals.

Obviously, there will always be a number of rental properties making the decision to sell up, for a variety of reasons. And just as obviously, a number of these properties could be purchased by investors with the intention of returning them to the rental market. However, to see so many properties being removed from a tight rental market in such a short space of time is something we should all be concerned about.

Of course, these numbers are probably good news for anyone with a rental property, or who is planning on purchasing one, as it suggests that the recent increases in median rentals are likely to continue for the foreseeable future. But it’s not good news for renters.

All I can suggest is that if you are considering becoming a property investor, be sure to get experienced and objective advice before you sign on the dotted line. Our team at Barry Plant Thomastown has extensive experience in this field and are always happy to help, whether you need guidance in finding the right property, or you need someone to manage that investment efficiently and professionally.

Feel free to give us a call this week if you like. The number is 9466 3233.

Best wishes,

Con Constantinou

Barry Plant Thomastown