The State Government has announced new fast-track home building rules as Melbourne rents jump 12.7% in just 12 months.The rent rise is more than double the previous year’s increase and almost three times the average annual increase over the past eight years.

The increase has pushed the proportion of rental properties that can be afforded by low-income earners down to just 25.2% – the lowest rate in eight years, the Victorian Office of Housing rental report for the September 2007 quarter shows.

The rental crisis has become so critical that federal, state and territory housing ministers will meet in Sydney on Wednesday to discuss the problem.

Rental vacancies across Melbourne are at just 1.4%, while the average vacancy rate for the period 2000-05 was 3.6%.

The surge in rent comes as the State Government moves to ease red tape for new homes.

Planning Minister Justin Madden said proposed new laws would reclassify residential zones into three categories: “substantial change zone”, “incremental change zone” and “limited change zone”.

These would replace the old residential zone one, two and three and are aimed at allowing councils to make faster housing development decisions.

“These new reforms will make a big difference to councils, giving them the tools they need to manage development and change in their municipalities,” Mr Madden said in a written statement.

People living in a “substantial change zone”, could see a rapid increase in housing and changes in style.

Opposition planning spokesman Matthew Guy said the proposed changes were an admission of failure for the Government’s planning blueprint, Melbourne 2030.

Meanwhile, the Victorian Office of Housing rental report blamed tight supply for the sharp increase in Melbourne rents.

The biggest rent rises were in inner-Melbourne, up 13.3% to $340 a week. Southern Melbourne jumped 13.2% to $300 a week and north-east Melbourne is up 13% to $260.

For the September quarter, rents increased by another 2.6% across Melbourne.

Kate Colvin from the Victorian Council of Social Service said the figures showed that the crisis in affordable housing was getting worse.

“With the state budget coming up in May we are hoping the Government will make a solid commitment to affordable rental housing,” she said.

“There is a particular issue for singles – it’s very, very expensive to get a one-bedroom apartment, even in public housing where the bulk of public housing is focused on families,” she said.

Housing Minister Richard Wynne’s spokeswoman, Manika Naidoo, said “rising rents are a complex problem and need to be handled on a national basis”.”The minister is meeting federal, state and territory housing ministers this week to start working on the national rental affordability scheme to put 50,000 affordable homes onto the market and make sure Victoria gets its fair share,” she said.

Raising the roof

- Rents across Melbourne up 12.7% in 12 months

- Inner Melbourne up 13.3% to $340 per week

- Southern Melbourne up 13.2% to $300 per week

- North-eastern Melbourne up 13% to $260 per week

- Median three-bed house rent across Melbourne up 14.9% to $260 per week

- Vacancy rate for Melbourne of 1.4% compared with 3.6% for 2000-05

Proposed new residential zones for Victoria

- Substantial change zone: Promotes significant increase in new dwellings

- Incremental change zone: Respects existing neighbourhood character

- Limited change zone: Recognises specific characteristics to be protected

SOURCE: VICTORIAN OFFICE FOR HOUSING, DEPARTMENT OF PLANNING AND COMMUNITY DEVELOPMENT

Author: Jason Dowling