Recent data about the availability of rental homes in Melbourne may provide an indication that the tight conditions of the past six years are beginning to ease.
The rental vacancy rate for Melbourne increased to 2.5 per cent from 2.2 per cent in June and was now well above the average for the past 12 months of 1.75 per cent.
Even if these conditions do continue to improve, the broad vacancy numbers do not paint the full picture.
Looking past the vacancy rates, what emerged was a very clear trend of substantially reduced availability of affordable rental homes. The government deems that a rental home is affordable when no more than 30 per cent of gross income is spent on rent. Lower income households are defined as those in receipt of Centrelink income.
In the March quarter this year a total of 17 per cent of all rental homes in Victoria were deemed to be affordable. The actual numbers varied, of course, across the city. For instance, in Manningham only two per cent were affordable, while in Dandenong it was nine per cent. There are very few areas in Melbourne where the rate of affordable rental homes is more than 10 per cent.
A few years back, when housing was not in such short supply, the availability of affordable rental homes was much better.
Six years ago, 45 per cent of rental homes were affordable. In Manningham it was 16 per cent and in Dandenong it was 79 per cent.
There is also a similar scenario in regional Victoria.
The only solution to this problem is the construction of more affordable homes.