Melbourne is the cheapest capital city to rent a four-bedroom house

Melbourne, Australia’s second-largest city and home to some of its most expensive property, is now the cheapest capital in which to rent a four-bedroom house.

New data from Domain has found that it costs just $450 a week to rent a four-bedroom house in Melbourne, almost $200 a week less than a four-bedroom equivalent in Sydney and $250 a week less than in Canberra.

The data was based on median weekly asking rent prices and found that despite Melbourne’s thriving post-COVID property market, four-bedroom houses were up for rent at bargain basement prices.

The data also found it was also cheaper to rent a three-bedroom house in Melbourne rather than a two-bedroom house.

Melbourne’s repeated lockdowns affected the city’s rental market across the board, said Ray White Group property management chief executive Emily Sims, who said larger rental houses had probably suffered due to the exodus of people from the city for a tree or sea change.

She said demand for one-bedroom rentals had also taken a massive hit.

“The first thing I thought is ‘who wants to be alone in a lockdown?’ ” Ms Sims said, adding many people had moved out of Melbourne because of the uncertainty.

“[Steady house asking rents] would be because the demand has left. Certainly, the number of people want to live there has decreased.”

But Melbourne’s relatively affordable four-bedroom house rents bucked the trend. Strong demand for more living space amid the coronavirus pandemic actually pushed up rental prices for larger homes everywhere else across Australia’s capital cities.

The median asking rent for a four-bedroom house jumped 5.2 per cent in Sydney to $630 a week and 7 per cent in Perth to $460 a week. 

Meanwhile, a lack of immigration and foreign students, combined with a flight to the suburbs — as the rise of remote working reduced the appeal of inner-city living — saw big rental drops for one-bedroom units in some cities.

The median asking rent for a one-bedroom unit in Melbourne fell 11 per cent to $325 in the year ended December 2020 and 10.4 per cent in Sydney to $430 – the two biggest unit rent declines.

Domain senior research analyst Nicola Powell said smaller rental properties suffered amid the uncertainty of last year.

“The smaller the apartment, the bigger reduction in rent in Sydney and Melbourne,” Dr Powell said.

Rental markets were more reliant on demand from new arrivals and international students had seen more disruption, she said.

“We’re struggling with the apartments,” The Agency’s national head of property management, Maria Carlino, said.

“The one-bedroom apartments and a little bit of the two-bedrooms that are close to the city or previously occupied by international students,” Ms Carlino said. “They’re the ones we’re finding that time on the market is a lot longer for.”

Dr Powell said the states that contained the virus well had their rental markets benefit from the better certainty. 

Canberran rentals had strong increases across the board for units and houses, with asking rents for a four-bedroom house rising 7.7 per cent to $700 a week – the most expensive of all the capitals.

Rents for four-bedroom houses in Adelaide also rose 7.7 per cent over the year to $490.

Darwin’s rental market had strong growth in every segment, with asking rents for units and houses of all sizes up by more than 10 per cent over the year. Rents surpassed many other capital city prices.

The median weekly asking for a four-bedroom house rose 16 per cent over the year to $615 — even one-bedroom unit rents jumped 13.5 per cent to $295 a week.

“Darwin is one of those that have benefitted from changing border restrictions. I think that’s helped drive increased demand for Darwin rentals,” Dr Powell said.

Real Estate Central property manager Lis Kastellorizios, based in Darwin, said a shortage of rental properties had led to sharp price rises. 

“It’s out of control at the moment. It’s a bit of everything,” Ms Kastellorizios said. “It’s people moving up to the territory. It’s also lots of locals as well who are moving.

“It doesn’t matter if it’s a unit or a house, there’s just a shortage [of rental properties].”

While some people were forced to stay in Darwin last year,  many moved to the Northern Territory, including landlords who owned some of the rental properties, Ms Kastellorizios said.

“You’ve got lots more owners moving back into properties and then a lot of people purchasing who’ve become owner occupiers,” she said.