The latest Domain Rental Report, found the pace of rent rises in Ballarat, Bendigo, Geelong, Mildura and the Surf Coast had outstripped that of Melbourne in the year to December 2018.
Along with rent hikes, prospective tenants in regional Victoria are met with a fiercely competitive environment where vacancy rates sit at around 1.3 per cent, according to the latest Real Estate Institute of Victoria data. The Gi 3 (Ballarat, Bendigo, Geelong) all had high gross yields, 5.6% or above; while typical Melbourne house yields are ~3%.
Median house rents in regional Victorian shires
Source: Domain Rental Report, December Quarter 2018
Investors descended on Ballarat in numbers in the past year, which has proven to be a hotspot for Melbourne rentvesters with a long-term plan of eventually moving to Ballarat to have children or retire. Strategic Buyers Agents has been active in this market for clients since 2016.
Francesca Nicol, director of Biggin and Scott’s Ballarat office, said an upswing in investor activity had coincided with a growing pool of people wanting to rent in Ballarat. “This year we’ve had a big influx of people who are moving here and would love to buy but find the market really perplexing to read,” Ms Nicol said.
Newcomers tend to rent for a year or two, she said, while they scope out the market and decide on their preferred suburbs.
The rental market has also been bolstered by students, wind farm employees, hospital staff and public servants moving into the shire, Ms Nicol added.
While the median rent has risen to $320 per week, Ms Nicol said high-end properties in the city could fetch between $720 and $900 a week, with local doctors among those willing to fork out a premium.