The Victorian tree-change towns where rents have soared

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Rents are higher than a year ago in almost every shire of regional Victoria, putting pressure on local communities still dealing with the pandemic tree-change trend almost a year after lockdown ended.
Asking rents for houses in every local government area of Victoria except one have risen over the past year, some by double digits, the latest Domain Rent Report for the September quarter, released on Thursday found.
Rents have risen across regional Victoria. Credit:Visit Victoria
Rents in the Moira shire, which includes Cobram in northern Victoria, jumped 20 per cent over the past year to a median $420 a week, compared to $350 a year earlier.
The Alpine, Ararat, Campaspe and Hepburn shires all recorded increases of at least 16 per cent.
House rents on the Mornington Peninsula – part of greater Melbourne but a key sea-change spot – are 11.8 per cent higher than a year ago. Some suburbs there have boomed post-lockdown such as Capel Sound (up 20 per cent), Blairgowrie (up 19.4 per cent) and Tootgarook (up 14.5 per cent).
Tree-changers are still moving out of Melbourne almost a year after lockdowns ended, seeking a change of lifestyle or local jobs, although the exodus has slowed as CBD offices have reopened and Covid restrictions have eased.
Domain chief of research and economics Dr Nicola Powell said the regional lifestyle is still a drawcard for Melburnians, albeit not as strong as during the lockdown period.
“The peak rate of rental growth has passed,” Domain chief of research and economics Nicola Powell said. “Rents are still rising, but not at the pace that they were.
“The focus has turned back to the city.”
After years of rent rises, some locals would hit an affordability ceiling that forced them to move to cheaper areas, she said.
“Low income earners will be feeling the pinch and feeling the brunt of the higher cost of rents,” she said, adding wages have not kept pace with rental growth, leaving some tenants with tough choices about moving home or skipping meals. An undersupply of social housing was affecting the most vulnerable, she said.
KPMG demographer and urban economist Terry Rawnsley said the flight to sea and tree change locations during the pandemic — as people took advantage of remote working and some older Australians brought forward retirement plans — had fuelled strong rental demand and prices.
A good year for agriculture and the ski resorts had also boosted regional economies, giving some tenants more to spend.
Rawnsley said the lack of affordable rentals meant other locals were priced out of the area, making it harder for regional towns to attract and retain key workers like hospitality staff, teachers and nurses.
City workers are still making tree-change moves.
“The danger is you have these communities that get hollowed out … It’s pretty common in some coastal communities now for the local bakery to only be open four days a week because they don’t have staff,” Rawnsley said.
“In the city going a few stops down the train line [when you’re priced out] is no big deal, but if you’re in a regional town and going to the next town that’s half an hour away where you don’t know anyone, it’s a bigger deal.”
It’s not only commutable tree-change centres near Melbourne where rents have risen. Some locals have been priced out and forced to look further afield, while the rise of remote work has also enabled Melburnians to move further away.
In Ararat, about 200km west of Melbourne, Ray White Ararat licensee in charge Adam Walker is fielding strong demand and multiple applications for rentals.
Interest is especially high in the mid to high $300 a week range, while demand for the top end of his market, at $400 to $500 a week, has slowed along with the lockdown-era tree-changers.
“We have had a number of people migrating because of Covid,” he said.
“It has slowed… but there’s still people moving here for employment, for a tree-change.”
He said there are new homes being built, which he felt the town needed as it grows and accommodates more residents.
Everybody’s Home spokesperson Kate Colvin said rising rents in regional towns were affecting locals and also local businesses.
“People who work in low paid essential services like child care or aged care or hospitality or retail can’t afford to pay the rent locally, so businesses can’t get the workers they need,” Colvin said.
She said the solution was more investment in social and affordable housing by state and federal governments, and more investment in homelessness services.
The federal government has promised 30,000 new social and affordable housing properties in five years and the state government plans to develop about 6000 social housing homes.
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