Stefan Bradley

Gippsland’s vacancy rate has continued to get worse for renters, including those in Wellington, according to the latest PropTrack Market Insight Report, released last week.

The vacancy rate in Latrobe-Gippsland statistical area level 4 (SA4) fell to 1.32 per cent in July, a monthly change of -0.2 ppt (percentage points). Quarterly change was -0.22 ppt, and annual was -0.45 ppt.

Earlier this year, the Gippsland Times had reported the SA4 vacancy rate as 1.52 per cent for January 2024.

Latrobe-Gippsland statistical area level 4 (SA4) includes all six Gippsland LGAs, including Wellington. It’s a geographical area the Australian Bureau of Statistics (ABS) uses to classify different regions.

PropTrack Senior Economist, Anne Flaherty told the Gippsland Times that population growth in SA4 continued to drive demand in the rental market.

“Rental conditions in Victoria’s Latrobe-Gippsland region have deteriorated significantly over the past 12 months, with the vacancy plummeting by 45 percentage points to 1.32,” Ms Flaherty said.

“Driving demand, population growth has been strong across Latrobe Gippsland, with the region adding an additional 3,383 people over the 12 months ending June 2023. Growth into the region was particularly strong over the pandemic years which saw many people relocate into Victoria’s regions.

“Compared to five years ago, there are an extra 22,818 residents living in Latrobe-Gippsland.”

Ms Flaherty said this growth is placing pressure on the region’s housing market, resulting in a shortage of available rental properties which has pushed rents higher.

“In contrast, home prices in the area have moderated over the past two years. In addition to headwinds to prices from higher interest rates constraining borrowing, the region is experiencing a correction from the high growth seen during the pandemic,” she said.

“While home prices are down 2.5 per cent from 12 months ago, they remain 46 per cent higher compared to March 2020.”

The median overall home price for SA4 was $563,290. For houses it was $584,776 and units $401,605.

The number of vacant rentals across regional Victoria as a whole declined in July. Regional Victoria’s rental vacancy rate fell 0.15 ppt month-on-month to sit at 1.21 per cent.

But on a national level, the rental vacancy rate held relatively steady in July, dropping just 0.01 ppt to 1.42 per cent. The slight drop in vacancy was driven by regional markets.

The PropTrack report suggests that “rising investor activity” is boosting rental supply nationally.

Ms Flaherty said, “While conditions remain incredibly tough for Australia’s renters, rental supply has improved over the past three months, with the national vacancy rate rising 0.18ppt to 1.42 per cent”.

Capital cities have seen the largest improvement, with vacancy up in six of the eight cities over the quarter.

“Supporting the rise in capital city vacancies has been an increase in investor activity, with the number of new loan commitments to investors up 25 per cent over the June quarter of 2024 compared to the same period last year,” Ms Flaherty said.

“Higher investor activity has resulted in more rental properties hitting the market, helping to counteract the increase in demand from population growth.

“Regional areas, in contrast, have seen conditions deteriorate further, with vacancy falling to 1.28 per cent in July. Vacancy in the regions has now held below capital city levels for three consecutive months.”

The share of rental properties vacant and available in Melbourne is 36 per cent lower compared to the start of the pandemic.

Ms Flaherty has previously said the pandemic saw an enormous number of people move from Greater Melbourne into regional Victoria, which really drove down the vacancy rate across the Gippsland region and across other regional markets.