Renters struggling to compete in private rental market as prices rise in Melbourne’s south-east

Sarah Keating is on a race to find a rental property before her two-year-old son outgrows his cot.

The 21-year-old single mum is currently living with relatives in Melbourne’s outer south-east.

She shares a room with son Ryder, but soon the two of them won’t fit.

“I’m trying to look for somewhere bigger to start our life and our family so that he has his own room, I have my own room,” she said.

“I just can’t find anywhere.

“My son can’t sleep in my bed every night with me. He needs his own bed.”

Ms Keating said she has been looking for a two-bedroom place in Melbourne’s outer south-east — suburbs like Dandenong, Pakenham, Officer, Beaconsfield, Noble Park and Clyde — for now about six months and has been applying for up to 30 places a month.

a blonde woman in a purple jumper smiles at the camera. there are plants behind her. — Sarah Keating says there is plenty of competition for rentals in Melbourne’s outer south-east.(ABC News: Crystalyn Brown)

She has some family and community support, a casual job where she works three days a week, plus Centrelink.

“I just keep getting emails saying I’m unsuccessful,” she said.

“There’s so many other people out there who are struggling to get houses and are in a worse position than I am, and I can’t get anywhere.

“We have children that need homes.”

Rental prices on the rise in outer-suburban Melbourne

Rental prices in some outer south-eastern suburbs have experienced strong growth in the last 12 months.

The median rental unit price in Officer, 48 kilometres south-east of the CBD, is now $380 a week.

That is an increase of nearly 9.5 per cent in the past 12 months, according to data from realestate.com.au.

At the same time, rent has dropped for similar properties closer to the city.

In Carlton, the median unit rental price has fallen by 10 per cent – it is now $360 per week.

That is less than in Berwick, Officer and Beaconsfield, all areas more than 30 kilometres from the city centre.

Peter McNamara is the CEO at South East Community Links, a community organisation that provides housing and financial assistance in Dandenong and surrounding areas.

a man in a suit looking at the camera. He looks very serious. — Peter McNamara says more people than ever are struggling to find rental properties in Melbourne’s south-east.(ABC News: Crystalyn Brown)

“Many people believe that the crisis is … just in the city, or they think that [it’s] the mortgage crisis we’re talking about,” he said.

“But more people are renting or struggling to find houses than those with mortgages.

“We are 30 to 40 kilometres out the CBD and you want to rent a two-bedroom apartment, it’s going to cost you $400 [a week].”

Landlords raising rents amid rate-rise fears

Ashleigh Salt is the rental director of Harcourts ASAP, which manages properties in Melbourne’s south-east, including Dandenong, Hallam and Noble Park.

She said many landlords, especially new investors, were increasing rents over concerns about future rate rises.

“They’re wanting a lot more,” she said.

“So say the rent [for a house] was, around $400 — because they’re uncertain around what’s going to happen with the interest rates, they may be wanting to start their rent around $460, just to cover themselves,” she said.

a woman sits at a desk and smiles at the camera. she is wearing black clothing with a blue striped necktie. — Ashleigh Salt says landlords are being choosier about tenants after not being able to evict anyone during the pandemic.(ABC News: Crystalyn Brown)

Ms Salt said the other change was landlords who were unable to chase rent, or evict tenants during COVID hardship rules being pickier about who they select for their property.

“Now they’re a little bit more nervous around who they put in and what kind of income they have, so if that was to happen again, they’re not in the same situation,” she said.

Changing housing market pushes rentals even further out of reach

Mr McNamara said with rising rents, vulnerable people were struggling to get anywhere applying in the private rental market.

“We also are concerned that there’s discrimination. That young mums or people on Centrelink payments are being pushed aside straightaway,” he said.

He said his organisation was also hearing stories of people offering extra rent, or months of rent in advance.

“How can you compete with that?”

Mr McNamara said the federal government should consider tying rental assistance to local rent prices, or urgently repurposing government buildings into low-cost accommodation.

Sarah Keating said she has no other choice than to keep applying.

“Just keep trying,” she said.

“That’s all you can do.”