Do you want to live in a well-known city for its laneways, street art and good coffee? According to experts, Melbourne is now also one of the most affordable capital cities in which to rent a home. We list the cheapest suburbs to rent in Melbourne. Australia's second-largest city, Melbourne, is known as one of the most liveable cities globally, and with good reason. It is famous for its foodie traditions, unique character buildings, leafy suburbs and cultural drawcards. But, of course, it is also considered by some to suffer from traffic congestion and unpredictable weather that could, as the Crowded House song goes, see residents experience four seasons in a day.
Surprisingly, however, at the time of writing, Melbourne is now the most affordable Australian city to rent a house in for the first time on record, according to real estate listing site Domain's Rental Report. The report states that the city's median house rent is $430 a week and is not rising. In contrast, Sydney's median house rent is $580 a week and rising by 5% or more a quarter, and Brisbane's is $460, rising by more than 2% quarterly. In addition, the median unit rent is $370 in Melbourne, compared to $410 in Brisbane and $485 in Sydney.
Property analysis company CoreLogic puts Melbourne's median rent for the September 2021 quarter (incorporating both houses and units) at $450, the second cheapest in Australia, just above Adelaide (at $440). CoreLogic's Research Director, Tim Lawless, says people living in Melbourne were spending less of their income on rent than the average Australian. Relative to household incomes, based on data to March, Melbourne was the most affordable capital city to rent, with households, on average, dedicating 26% of their gross annual household income to rent a dwelling compared with the national average of 28.7%
However, these media figures don't tell the full story of what's going on. When examining prices at a suburb level, the statistics show that rents are surging in some suburbs after earlier phases in the COVID-19 pandemic while falling in others. For example, House and unit rents in the outer east, southeast, and Mornington Peninsula are high. But Domain has a tip for renters: try units closer to the city. And soon, before prices and demand go up.
Overall, Melbourne continues to record weak rental growth, becoming a renters' market the closer to the city, a positive for tenants looking for more affordable rentals. So for tenants, now is the time to secure a deal in those areas that have seen a significant drop in rent, because while overall unit rents are the same as they were in 2015, vacancy rates have continued to decline, suggesting the empty pool of rentals will continue to shrink. Prices will not stay this low for very long.
Most Affordable Suburbs In Melbourne
Some of the most affordable suburbs Melbourne has to offer in 2021 hold great opportunities for property investment. Pick the right postcode, and you stand to benefit from accessible entry prices, rapid growth rates and consistent rental returns.
Melton is the cheapest suburb in Melbourne with a median house price of $410,000 and tops the list as the most affordable suburb in Melbourne, followed by Melton South ($441,000), Cobblebank ($545,000) and Kurunjang ($445,000).
Adelaide is the cheapest place to rent in Australia, but Melbourne renters are also winning as prices have barely increased in the past 12 months.
Latest Domain figures show sharply diverging fortunes, with 3.8 per cent of homes for rent in Melbourne empty of tenants in August, up from 3.7 per cent the previous month, compared to a steady 2.6 per cent in Sydney.
FAQs About Place To Rent In Melbourne
Where property investors can nab a house for around $600k
- Median house: $603,750
- Median unit: $470,000
In Melbourne's southeast, Officer has a lot going for it, not least affordable median house price in the $600k range and $470,000 for units. Throw in great access to public transport, in the form of local train stations and the Princes Freeway, and you can see why investors have the suburb on their radar. There is also a decent selection of schools and other essential amenities like restaurants, shopping centres and a hospital - which makes it popular with families.
In terms of rentals, houses currently rent out for $400 per week, with an annual rental yield of 3.4per cent, while units rent for $370 per week with a rental yield of 4.2 per cent. As a result, officers have recorded a compound growth rate of +13.2 per cent for houses and +4.9 per cent for units over the last five years.
A market ripe for property investments in Melbourne
- Median house: $410,000
- Median unit: $335,000
If affordability is your number one priority, then Melton, 35 kilometres from the city, should be on your radar. With median property prices of $410,000 (houses) and $335,000 (units), these are some of the cheapest properties that can be had in metro Melbourne. In addition, the suburb has its railway station, is close to the airport and has decent schools.
Melton property has posted a growth rate of +10.0 per cent for houses and +7.6 per cent for units over the last five years. In terms of rentals, you can expect to receive $320 per week for a house with an annual rental yield of 4.1 per cent, while units rent for $300 per week with a rental yield of +4.7 per cent.
A burgeoning Melbourne suburb in the outer-west
- Median house: $580,000
- Median unit: $455,000
Moving to Melbourne's outer west, you find 'new' suburbs with contemporary homes and generous block sizes where housing estates dominate. Tarneit, like neighbouring Hoopers Crossing, is close to Werribee and all it has to offer, with the Bay and easy enough access to the CBD. Median property prices range from $580,000 for houses to $455,000 for units, with houses renting for $380 per week while units rent for $345 per week. Over the past five years, price growth has been healthy, with houses up +7.2 per cent and units +7.6%.
The suburb that's close to everything
- Median house: $565,000
- Median unit: $410,000
Like Tarneit, Hoppers Crossing has a lot going for it - especially for families and established mature couples who don't need to be right on the doorstep of the CBD. If you need to access the city lights, it is 23 km from the city. Currently, the median price for a house is $565,000, while the median price is $410,000.
From an investment property perspective, houses in the suburb rent for $350 per week, with units returning $315 per week. Like neighbouring suburbs, compound growth has been respectable over five years, houses advancing +7.8 per cent and units +6.4 per cent.
Investing In Craigieburn
Melbourne’s family-friendly suburb in the city’s outer north
- Median house: $580,000
- Median unit: $405,000
Craigieburn in Melbourne outer-north was once the country, but times have changed - though you can still count on affordable property in this rapidly developing area. Housing developments dominate, with lots of green space and sporting facilities to complement the laid-back vibe. Units are currently at a median price of $405,000 and renting for $349 per week, while houses are at a median price of $580,000 and renting for $400. You can expect an annual rental yield of 3.6 per cent from houses, while units will yield in the region of +4.5 per cent. Growth rates over five years have been steady here, with houses up +8.0% and units +3.1%.
Where property investors can buy a house for ~$550k
- Median house: $565,000
- Median unit: $405,000
Some 58km southeast of the CBD, Pakenham is very much about families, with planned estates and an outdoor vibe. But, in terms of lifestyle attractions, it has it all - from local primary and high schools to sporting facilities and shopping centres - with the Dandenong Ranges and Yarra Valley right on your doorstep.
Median property prices range from $565,000 for houses that rent for $370 per week to $405,000 for units that rent for $340 per week. As a result, the annual rental yield for houses is +3.4 per cent, while units yield +4.4 per cent. As a result, Pakenham has recorded a compound growth rate of +8.3 per cent for houses and +7.0 per cent for units over the last five years.
Where investors can get a house for under $550k
- Median house: $540,000
- Median unit: $400,000
Werribee, situated between Geelong and Melbourne, has a lot going for it from a lifestyle perspective - with river frontage, a zoo, winery, beautiful parklands, a major shopping centre, and the beach. There is also an express train to the CBD, making it popular with families and professionals alike.
Surprisingly median property prices are still under $600k here, with houses at $540,000 and units at $400,000. In terms of rentals, houses in Werribee rent out for $350 per week, with an annual rental yield of +3.4 per cent. You can expect in the region $315 per week from a unit here, with a rental yield of +4.1 per cent. Compound growth rates in Werribee are a healthy +9.7 per cent for houses and +6.6 per cent for units.
Investing In Dallas, Melbourne
Affordable investment properties under $500k
- Median house: $488,000
- Median unit: $421,000
As we have seen, if you want real value in Melbourne, then head north. For example, Dallas has a median house price of $488,000, while units fetch an average of $421,000. Besides being close to the airport and Coolaroo and Upfield train stations, there is good access to the CBD 18km away via the Hume Highway, making it popular with young people, families, and retirees.
In terms of returns on rentals, houses in Dallas rent out for $348 per week with an annual rental yield of +3.7 per cent and units rent for $310 per week with a rental yield of +3.8 per cent. Growth rates are also healthy, with houses up +8.5 per cent over five years, while units advanced + 8.3 per cent over the same timeframe.
Leafy lifestyle for families and students
- Median house: $825,000
- Median unit: $620,000
In the eastern suburbs of Melbourne, Croydon is all about a leafy, laidback lifestyle with good schools and the stunning Dandenong Ranges as a backdrop. The suburb is popular with families and students - and there's still good value to be found despite it falling just outside our median limit.
Houses are just over the city's median dwelling price at $825,000, with apartments at a median of $620,000. If you are looking for an investment property, houses rent out for $450 per week with an annual rental yield of +2.8 per cent, while you can expect to receive $400 per week from a unit with a rental yield +3.4 per cent. The compound growth rate for houses in Croydon is +4.9 per cent for houses and a healthy +5.7 per cent for units.
Snap up an affordable Melbourne apartment
- Median unit: $487,500
Green and leafy Carlton, proximity to the CBD and educational institutions make the suburb the perfect location to invest in an apartment. Besides the area's rich Italian heritage, you have bustling Lygon Street and nearby Brunswick Street, strong lifestyle drawcards. Other obvious attractions are the suburb's walkability and access to public transport.
The median price for a unit in Carlton is $487,500, with a one-bedroom unit median at $215,000 and a two-bedroom median at $605,000. The real attraction is the consistent and generous rental yield of +3.7 per cent.
Tips On Finding A Better Place To Stay
Choosing a house or apartment to rent in Melbourne is an exciting first step of building your new life here. There are several rules and regulations that you must follow when you become a tenant (renters are called tenants). Those offering a property for rent (called landlords) also have rules and regulations.
Housing Types, Locations And Prices
Melbourne boasts an exciting property market with housing options to suit everyone's needs – from beautiful, older Victorian-era and Edwardian-era homes to deluxe contemporary homes. New homes and contemporary apartments are also being constructed all the time.
Whether you're looking to rent in Melbourne or regional Victoria, you'll enjoy access to properties in many styles and sizes.
Find A Rental Property
In Victoria, real estate agents are generally responsible for renting houses and apartments to tenants on behalf of owners. But you can also rent directly from an owner. In addition, you can rent a single room in a property or share a house with a group of friends or family – the rental option you choose depends on your needs.
What's Included In Renting A Property
Most rental properties do not come with furniture but will generally include:
- hot water systems
- light fittings
- curtains or blinds
- kitchen cupboards.
Many also include air conditioning, dishwashers and built-in wardrobes. Utility costs such as water, gas and electricity can vary from property to property if they're not included in the standard rent price. It's a good idea to check with your real estate agent or property owner about utility costs.
How To Secure A Rental Property?
Once you have decided on the area, you are interested in. But, first, you will need to secure your rental property. These tips will help show you what you need to do.
Inspect The Property
The first step is to inspect the property you are interested in, as real estate agents usually only accept applications from people who have seen the house or apartment. If you cannot inspect the property yourself, you can send a representative. It is not only important for the real estate agent to meet you (or your representative), but it is also important for you to check that the property is in working condition. There are three ways to view a property for rent:
- attend an open for inspection held at a specific time
- make an appointment with the real estate agent
- Collect the key from the real estate agent's office.
- If you are attending an open inspection, you must be prepared to show identification (such as a driver's licence or passport).
Submit An Application
To secure a rental property, you will need to complete and submit an application. The application usually includes details about where you have lived and worked, including your current income. It is also common to request references, so it is useful to bring written references with you to Australia if you have rented before.
Sign A Lease
Once all parties are happy to proceed with a lease agreement, you must sign the lease. This is a legally binding agreement and does not have a cooling-off period (a time that allows you to change your mind). A lease records details such as:
- how long you can live in the house
- how much rent you must pay and when you must pay it
- Whether there are any special conditions about your home (such as keeping pets).
Read the lease thoroughly. If you are concerned about any items or have questions, clarify them with your landlord or real estate agent. Any existing issues with the rental property should be agreed upon with your real estate agent and recorded on a rental inspection sheet before you sign a lease. Your rental period will begin on the agreed date specified in the lease agreement.
Connect Utility Services
After signing a lease, you will officially be a tenant in the rental property. Congratulations are in order. It is your responsibility to connect utility services such as electricity, gas, water, telephone and internet.
Pay A Bond
A bond is a payment made by you that acts as security for the landlord or owner against you if you don't meet the terms of your lease agreement. For example, if the rental property is damaged while you're staying in the property, the landlord can withhold the bond from you to cover the cost of repairing the damage. The bond cost is generally around one month to six weeks' rent. Your bond is kept by the Residential Tenancies Bond Authority External link until you move out of the property. When you move out, the bond you paid will generally be refunded, less any costs incurred for cleaning or repairs that were your responsibility.
Complete A Condition Report
Before moving in, check that everything works as it should (like the oven, taps and drains, lights, heating, security systems and locks) and is in good order (like paint, floors and carpets, and glass or other window fittings). You should note anything that needs to be fixed or replaced on the condition report and bring it to the attention of your real estate agent or landlord so that they are aware of it.
It is not that difficult to find affordable suburbs in Melbourne, but the affordability mark is different for every individual. Even if the cost of the property is your priority, you should not overlook other essential aspects such as health facilities, schools, shopping, and commute distance to work. All of these factors play a vital role. If you are looking for an affordable option in Melbourne, consider the aforementioned suburbs.