HEY NEIGHBOUR!

As we head further into winter, there certainly seems to be no shortage of things happening around us. The cost of living continues to dominate conversations, interest rates remain under the microscope, and if you have been following politics lately, you will have noticed the temperature is starting to rise well ahead of the next State Election.

The political landscape is becoming increasingly interesting, with Labor, the Liberals and One Nation all beginning to sharpen their messages as they position themselves for the campaign ahead. Discussions around housing affordability, immigration, taxation and government spending are already taking centre stage, and no doubt these topics will continue to dominate headlines over the coming months. Recent commentary around potential cooperation between conservative parties and the growing influence of One Nation suggests that the next election campaign could be one of the most closely watched in years.

One story that certainly caught my attention this month was the Senate Estimates hearing involving Senator Michaelia Cash and Australia's Sex Discrimination Commissioner, Dr Anna Cody. The discussion centred on how Australia's discrimination laws are interpreted, particularly around pregnancy protections and gender identity. This is what our taxes are paying for Watch Here.

Closer to home, there is finally a bit of optimism for Carlton supporters. Since Michael Voss's departure, the Blues have strung together four consecutive wins and suddenly look like a completely different side. As someone who has spent much of the last few seasons riding the emotional rollercoaster that comes with supporting Carlton, we may finally be heading in the right direction.

In this month's newsletter we look at some of the stories that caught our eye, upcoming rental property compliance changes and what many commentators are now calling Melbourne's potential property market comeback.

Stay warm and enjoy the read.

Warm regards,

Carmela

MARKET INSIGHTS

We strive to stay up to date on the latest market trends. Here are a few articles we think are worth reading.

Claremont Financial x The Neighbourhood - Update from Claremont Financial (claremontfinancial.com.au)

Key Highlights:

• Interest rates: RBA raised the cash rate to 4.35% — third hike this year. Variable home loan rates have moved up in step. Next decision on 16 June.
• Rental Market: National vacancy at a record-tight 1.0%; Melbourne at 1.4%. Rents up 6.6% year-on-year — roughly twice the pace of wage growth. Domain is forecasting record asking rents across every capital in 2026.
• Rental Yields: Melbourne gross yields expanding for the first time this cycle — 3.8% on dwellings and 4.9% on units, as rents rise while values soften.
• Property Values: Melbourne median at $822,969, easing slightly but still +2% annually. Strongest rental demand in affordable pockets — Frankston, Sunbury, and Brimbank leading the pack.

What to Watch

• Vacancy through the cooler months — if it holds tight nationally and in Melbourne, rents keep rising
• Next RBA decision: 16 June
• Budget tax changes still moving through Parliament

What this means for you:

• Melbourne Rental providers are well-positioned — tight vacancy and rising rents are delivering the strongest fundamentals this cycle
• Yield-focused investors should look at Frankston and the Peninsula corridor for strong rental demand
• A loan review is worth doing to make sure holding costs aren't eating into those improving returns

If you wish to discuss this further, feel free to reach out.

Melbourne Landlords Have Just Been Given Their 2027 Compliance Countdown (consumer.vic.gov.au)

Victorian rental providers are being put on notice, with new minimum energy efficiency standards rolling out from 1 March 2027. Though it may seem far off, owners should start budgeting for upgrades now. The reforms will progressively cover heating, cooling, hot water systems, insulation, draughtproofing and water-saving showerheads, aiming to cut energy costs and improve housing quality for renters while adding new compliance obligations for owners.

What this means for owners:

• Start planning capital works now rather than waiting until the last minute.
• Older properties are likely to require the most significant upgrades.
• Government rebates and incentives may help offset some costs.
• Energy-efficient homes are becoming increasingly attractive to renters.
• This is one of the biggest changes facing Victorian Rental Providers in coming years, with potential impacts on maintenance budgets and property values.

Is Melbourne About to Become Australia's Property Comeback Story? (kpmg.com.au)

For the past few years Melbourne has lagged behind other capital cities, but a growing number of economists believe that could change in 2026 and beyond.For the past few years Melbourne has lagged behind other capital cities, but a growing number of economists believe that could change in 2026 and beyond. Affordability relative to Sydney, strong population growth and ongoing housing shortages are drawing renewed investor interest, with some forecasts even tipping Melbourne to outperform other capitals as demand picks back up. Meanwhile, supply continues to fall short of population growth, putting long-term pressure on both prices and rents.

Key Points:

• Melbourne is increasingly viewed as an undervalued capital city.
• Population growth continues to underpin long-term housing demand.
• Supply constraints remain a major challenge.
• Investors are beginning to re-examine Victorian opportunities.

REIV Rental Vacancy Rates – April 2026 (reiv.com.au)

The latest REIV data shows rental vacancy rates ticking up slightly across Victoria, though the market remains relatively tight.

Key Points:

• Metropolitan Melbourne vacancy rate: 2.6% — up from 2.5% same period last year
• Regional Victoria vacancy rate: 2.3% — up from 2.1% same period last year
• Both figures remain below the healthy market benchmark of 3–4%, continuing to support upward pressure on rents