A Department of Health and Human Services Rental Report revealed the number of new rental lettings in Victoria fell 14.2 per cent to 12 months to March, lending to property investors dropped 24 per cent.
New tenants are looking for homes near train stations for partners still working in Melbourne.
At the same time, affordability has slipped, with 15.5 per cent in Geelong below the 30 per cent of income threshold.
West End Real Estate director Gina Tobolov said more people were choosing to rent and were staying in one place for longer.
“There’s a lot of publicity in the media saying that people have to rent because they can’t get into the market. That’s true, but we also deal with a lot of people that choose to rent because they like that flexibility,” Ms Tobolov said.
Agents said new tenants were getting a feel for Geelong suburbs, especially around school zones and near train stations for families where one partner still worked in Melbourne.
The demand has meant crowds of 30 and even 50 groups waiting to view some homes.
Geelong’s population boom is also impacting the rental market. Picture: Alan Barber
High-demand suburbs included Belmont and Highton, where schools were the biggest factor, while big backyards created a rush for families in many inner-Geelong areas like East and South Geelong. Melbourne tenants were also keen character homes in Geelong West and Newtown.
But she said new suburbs like Armstrong Creek were oversupplied as investors built new houses.
“Last week there was 34 four-bedroom houses for lease in Armstrong Creek, which is really high,” she said.
Some even offered to pay a higher rent, or up to six months upfront, to secure a lease, Ms Tobolov said — a practice to be outlawed under recent changes to the Residential Tenancies Act.
“But we don’t take that into consideration, we still process every application in the same way and present them to the landlord,” Ms Tobolov said.
Hayeswinckle property manager Jess Scholer said it was hoped investors who chose to wait out the federal election and financial year would step in next month to bring more homes to rent.
Release Property Management director Renee Reynolds said some mum and dad investors had sold up at the height of the property market late last year.
“I think since the election, more properties are coming on for lease” she said.
“For anyone wanting to purchase a property to grow an asset, they’re quite confident now.”
Geelong house prices and rents
| Suburb | Median price | 12m % change | Median rent | Rental yield |
| Armstrong Creek | $535,000 | 12.3% | $420 | 4.1% |
| Bell Park | $447,000 | 7.7% | $350 | 4.1% |
| Bell Post Hill | $485,000 | 10.2% | $370 | 4.0% |
| Belmont | $530,000 | 5.0% | $375 | 3.7% |
| Breakwater | $385,000 | 14.8% | $335 | 4.5% |
| Charlemont | $463,750 | n.a. | $410 | 4.6% |
| Corio | $372,000 | 14.1% | $300 | 4.2% |
| East Geelong | $615,500 | 1.8% | $390 | 3.3% |
| Geelong | $730,000 | 1.4% | $410 | 2.9% |
| Geelong West | $667,000 | -2.6% | $390 | 3.0% |
| Grovedale | $495,000 | 10.0% | $395 | 4.1% |
| Hamlyn Heights | $545,000 | 6.9% | $360 | 3.4% |
| Herne Hill | $550,000 | 7.6% | $360 | 3.4% |
| Highton | $670,000 | 4.7% | $420 | 3.3% |
| Lara | $525,000 | 16.7% | $400 | 4.0% |
| Leopold | $496,750 | 9.2% | $395 | 4.1% |
| Lovely Banks | $540,000 | 17.4% | $415 | 4.0% |
| Manifold Heights | $750,000 | 5.5% | $390 | 2.7% |
| Marshall | $488,000 | 11.7% | $400 | 4.3% |
| Mount Duneed | $550,000 | 8.4% | $430 | 4.1% |
| Newcomb | $455,000 | 19.7% | $330 | 3.8% |
| Newtown | $800,000 | 2.6% | $440 | 2.9% |
| Norlane | $356,000 | 14.8% | $265 | 3.9% |
| North Geelong | $503,500 | 18.2% | $335 | 3.5% |
| Rippleside | $701,000 | -6.5% | $445 | 3.3% |
| South Geelong | $678,000 | 2.4% | $426 | 3.3% |
| St Albans Park | $450,000 | 15.4% | $370 | 4.3% |
| Thomson | $412,000 | 10.6% | $320 | 4.0% |
| Wandana Heights | $702,000 | 4.0% | $595 | 4.4% |
| Waurn Ponds | $630,000 | 13.5% | $445 | 3.7% |
| Whittington | $385,000 | 20.0% | $320 | 4.3% |
Source: CoreLogic, Median house prices and rents, capital growth for 12 months to March, 2019