MANSFIELD is just one of a number of regional Victorian towns to experience a steep rise in rental prices over the 12 months leading to September 2024.
A rental report published by online real estate marketplace Domain said the average rental price of a home in Mansfield township rose from $500 to $550 in 2024.
Of the 39 regional towns in which rental prices went up, only Macedon Ranges (13.2 per cent) and Shepparton (11.9 per cent) reported larger increases than Mansfield (10 per cent).
The increase brings Mansfield’s average rental price closer to the average price of metro Melbourne ($580) than that of regional Victoria ($470).
According to Domain, prices have gone up 45.3 per cent in the five years to September 2024.
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Increased prices are forcing some Victorian renters to reassess what they want, or rather what they can afford, in a home.
Indeed, the Australian dream of the spacious house on a block of land generous enough to hold a pool, a barbecue, and a game of backyard cricket is a thing of the past for some.
“We have seen house rents flat-line over the quarter, but unit rents have risen, so it looks like there is more momentum for units rather than houses, which says a lot about affordability,” said Domain Chief of Research and Economics, Dr Nicola Powell.
The price increases that are forcing renters to reassess their options are similarly being felt by landlords who are being forced to take drastic measures to adapt to challenging new market conditions.
According to Dr Powell, land tax increases and growing concerns about rental regulation changes are causing many landlords to leave the market altogether.
As these landlord’s properties are taken off the market, a shortage of rentals leads to increased competition which further drives up prices.
“What we will likely see is a positive rate of growth in prices and demand for rentals,” said Dr Powell.
“The rental market has tightened considerably since 2021,” wrote Fred Hanmer and Michelle Marquardt in a paper published by the Australian Bureau of Statistics
“Rent inflation has picked up.
“Rent increases have also become more common, and larger on average.”
These increases in rental prices appear to reflect a catch-up with the rising purchase prices for homes in Mansfield.
In the five years to June 2023, purchase prices rose by 88.5 per cent before experiencing a 9.1 per cent decrease in the 12 months to June 2024.
Whether this correlation will attract landlords back to the market in search of improved rental yields, potentially alleviating the rental shortage and stabilising the market, remains to be seen.
