Landlords are selling up in droves across Victoria with more than 41,000 rentals offloaded in the past financial year.

Williams Landing was home to the state’s highest share of investment property sales, with 112 homes previously available to tenants among the 296 total sales, or about 38 per cent.

South Yarra was home to the next greatest share of ex-rental sales at 37 per cent, with as much as 732 of its former rentals sold and potentially no longer available to tenants.

Hawthorn East was next at 36 per cent, followed by Albert Park, 35 per cent.

The figures from Suburbtrends track sales listings in the 12 months to June 30 and found 105 Victorian areas of 262 assessed had landlords behind at least 20 per cent of their sales from Aspendale to Coolaroo.

It comes after PropTrack revealed Victoria’s rental vacancy rate in June was just 1.47 per cent — a healthy market usually has 3-4 per cent of properties to lease available.

Suburbtrends founder Kent Lardner said the landlord exodus meant the loss of critical rental stock at a time when more housing was urgently needed.

“We need the rental pool to be expanding, not getting smaller,” Mr Lardner said.

He said soaring mortgage costs were the main driver of increased investor sales in many markets.

“It’s a survival strategy; it comes down to cost of living pressures. Negative gearing makes sense if your investments are profitable, but it becomes a lot less attractive when you’re digging deep into your own pocket each month to pay for an investment,” he said.

“Investors who bought three or four years ago are the ones most reactive to rate hikes. Many didn’t plan for this level of interest rate.”

Mr Lardner added that the reality was that there was a rent crisis because there hadn’t been enough housing built and landlords were actually struggling.

Suburbs where most ex-rental homes were listed for sale in FY24

Suburbs	Ex Rental	Not Ex Rental	Grand Total	Percent
3027 – Williams Landing, Laverton North	112	184	296	38%
3141 – South Yarra	732	1260	1992	37%
3123 – Hawthorn East	298	540	838	36%
3206 – Albert Park	125	235	360	35%
3055 – Brunswick, Brunswick South, Brunswick West	203	393	596	34%
3182 – St Kilda	545	1109	1654	33%
3184 – Elwood	300	615	915	33%
3183 – Balaclava, St Kilda East	245	530	775	32%
3071 – Thornbury	157	341	498	32%
3053 – Carlton	375	834	1209	31%
3032 – Ascot Vale, Maribyrnong	341	804	1145	30%
3012 – Brooklyn, Kingsville	289	682	971	30%
3181 – Prahran, Windsor	415	985	1400	30%
3054 – Carlton North	60	152	212	28%
3129 – Box Hill North	194	493	687	28%
3052 – Parkville	48	122	170	28%
3068 – Clifton Hill, Fitzroy North	149	381	530	28%
3174 – Noble Park	263	685	948	28%
3175 – Dandenong, Dandenong North, Dandenong South	437	1140	1577	28%

“We had the solution 40 to 50 years ago, which was social housing, but we turned our back on it,” he said.

“We have to accept that the private landlord market has delivered us unaffordable housing.”

Property Investment Professionals of Australia (PIPA) chair Nicola McDougall said the number one issue that investors have had with the Victorian market was the new land tax regime which had added thousands of dollars in costs to investors.

But Ms McDougall said the investment fundamentals for Melbourne were still very strong as Australia’s most popular city and the “economic powerhouse” of the nation.

“However, in a time where mortgage repayments have skyrocketed, many investors perhaps just (aren’t) financially able to hold on to those properties,” she said.

“They can’t manage their increased mortgage repayments, and in a time where they feel that the Victorian Government is treating them very poorly with myriad anti-investor policies, they have decided that’s enough.”

BigginScott Wyndham City managing director Sam Arora said there was an influx of investors who purchased homes in Williams Landing in about 2014, but since land taxes have increased, many had decided to sell.

Mr Arora said about 70 per cent of the homes listed for sale at his agency were investment properties at the moment.

Tenants Victoria director of community engagement Farah Farouque said the reality was that the “churn” of rental property, or buying and selling by landlords for investment reasons, was a built-in feature of Australia’s market-based rental system.

“Around nine in 10 households rent privately-owned housing because compared with many other countries we don’t have much social housing, which is owned and operated by government or charities,” Ms Farouque said.

“There is no doubt we need more supply of rental homes, and we need to urgently build more social housing in our state because it offers greater security for renters on lower incomes.”

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TOP TEN SUBURBS WITH THE BIGGEST SHARE OF RENTAL SALES

Rank – Suburb – Percentage of listings that were ex-rentals in FY24

1. Williams Landing – 38 per cent

2. South Yarra – 37 per cent

3. Hawthorn East 36 per cent

4. Albert Park – 35 per cent

5. Brunswick – 34 per cent

6. St Kilda – 33 per cent

7. Elwood – 33 per cent

8. Balaclava – 32 per cent

9. Thornbury – 32 per cent

10. Carlton – 32 per cent

Source: Suburbtrends

Originally Published: Sarah Petty | Daily Telegraph | 13 July 2024

https://www.dailytelegraph.com.au/property/41000-victorian-exrentals-listed-for-sale-in-last-12-months-suburbtrends/news-story/6478b011594ba93e7d14ebc3f9f1d1cc?btr=576f2fb6d92a2b462b91b0eadf79f130

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