THE Victorian rental market may be facing a significant crisis in the next 12 months according to a leading quantity surveyor, but local real estate agents have said the Hamilton market may not be subject to the same pressures in metro areas.

According to MCG Quantity Surveyors, the number of new investor loans has dropped dramatically, leading to a shortage in rental stock and increased pressure on the market.

“Victoria’s rental market is in a precarious position,” MCG Quantity Surveyors managing director, Mike Mortlock said.

“Over the last three months, investor loans in Victoria totalled 10,220, resulting in an annualised figure of 40,880. During the same period, annualised ex-rentals were calculated at 45,924.

“This means we’re looking at a net loss of 5044 rental properties, a one per cent decrease in the state’s private rental stock.”

The firm said the issue was not just about existing landlords exiting the market but that potential new landlords were also wary of investing in Victoria.

The trend suggested a broader reluctance among investors, exacerbated by policies and market conditions that dissuade investment in the state’s rental properties.

But Groves Real Estate principal, Darren Groves told The Spectator the trend wasn’t one he has seen locally.

“At this stage we haven’t seen an abnormal number of landlords selling their rental properties, in fact our rental roll continues to grow,” he said.

“Landlords still believe that Hamilton is a good, safe city to invest in.”

“Hamilton has a large number of professional residents who are on contracts, such as teachers and medical professionals, so we do have a number of quality tenants compared to other towns. It’s business as usual for us.”

Elders Hamilton Real Estate senior property manager, Penny Cotterill said while she could see the overall market conditions weren’t as good for investment, she agreed any direct effects weren’t locally visible.

“I can certainly attest to the fact that some landlords are unhappy with current conditions and new laws and are tending to sell instead of re let their properties,” she said.

“As for a shortage I do not believe so.  We have more vacant properties on our rental list than we have had for some time.

“The price of rentals in Hamilton has certainly increased which sadly puts quite a few people out of the rental market as Hamilton does not support the income levels needed to facilitate such a rise.”

A recent report released from CoreLogic has noted a jump in vendor activity from a year ago - Melbourne rose at +34.8 per cent and Regional Victoria at +39.4 per cent.

The total number of advertised properties in Regional Victoria is sitting above the previous five-year average at +29.7 per cent.

In the first quarter of 2024, regional dwelling values and rent prices set new records, with house prices increasing by 2.1 per cent and rents rising by 6.3 per cent, both outpacing growth in capital cities.

Mr Mortlock said he has seen a definite change recently.

“Landlords are increasingly cautious about entering the Victorian market,” he said.

“It’s not just about those who are leaving. Many potential investors are now avoiding Victoria altogether, seeking opportunities in other states with more favourable conditions. This reluctance to invest is further shrinking the available rental stock, making it harder for tenants to find affordable housing.”

Mr Mortlock went on to say it was crucial to avoid the blame game and focus on constructive solutions.

“We need to resist the temptation to point fingers at landlords,” he said.

“Blaming them as the bad guys will only exacerbate the problem, making things even worse for long-suffering renters. Instead, we should work on creating a more supportive environment for property investors, which in turn will help stabilise and grow the rental market.”