Coming from Sydney, Boris Cheung expected there would be more choice for apartment rentals in Melbourne, but was surprised at just how selective he could be when he moved to the city late last year.

He was the only person who turned up at a Saturday open for inspection in December for a near-new apartment in South Yarra. The one-bedder, in a boutique block, was asking $425 a week.

But when he strategically inspected the apartment twice more and was again the only interested party, the 26-year-old finance analyst used it as bargaining chip to negotiate the rent down to $410 a week.

“I wasn’t surprised with the availability within the market, but more so that I found what I was looking for so quickly, being more selective with what I wanted,” he said.

Mr Cheung is one of many apartment tenants currently enjoying abundant choice and cheaper rent in the inner city as oversupply starts to take hold.

An industry report recently predicted Victoria would be the most oversupplied market in the country by 2017, led by high-density apartment development in the inner and middle ring. The state will have 7592 more dwellings than it needs by the end of the year and 21,881 more homes than it needs by 2017, according to BIS Shrapnel’s forecasts.

And as new stock hits the market, older apartments are becoming less appealing to renters spoilt for choice.

Michael Bramham, 27, invested in a two-bedroom older-style apartment in Collingwood two-and-a-half years ago.

It was leased immediately for $395 a week, but when his tenants vacated after a year, it sat vacant for a month.

With a large number of new apartments in Collingwood creating softer demand, his new property manager recommended lowering the rent to $380 – and it leased after a fortnight.

“I took the plunge and decided to just drop it to where it needs to be because the more weeks I go without rent, it’s no point having it at that high price,” Mr Bramham said.

One senior St Kilda property manager said she was struggling to get anyone to even turn up to open for inspections and had to contact prospective tenants regarding their applications within 24 hours or they would move on.

“They can just pick and choose,” she said. “They’ll even say yes to a few and later decide on the best deal.”

Buyers’ advocate Cate Bakos had to gradually drop the rent of her ’60s St Kilda apartment with each tenant term over the past three years – from $290 a week to $240.

When her last tenant vacated, and the property manager recommended lowering the rent even further, Ms Bakos realised there was a problem.

“We kept finding that our tenants weren’t staying for a long time, and the feedback was consistent – that they were going for newer, glossier properties,” she said.

Ms Bakos completed an extensive renovation over three months on a budget of about $30,000, and is now receiving $320 a week in rent.

“It’s been very difficult with the oversupply that we’ve got, and in particular the new glossy apartments with reasonably low rental yields because you’ve got landlords competing with each other,” she said. “They’ve really undermined the dated, older properties.”

More than 1000 units were approved in the six months to December in Footscray last year – the third most in the city according to the Australian Bureau of Statistics – leaving agents concerned.

“When we’re talking houses, we can’t get enough,” said Jas Stephens managing director Craig Stephens. “But the mass produced towers have traditionally struggled – we are holding our breath to see.”

With a large volume of new apartments being built in Prahran, Biggin and Scott’s Suzie Farrell said buying off-the-plan was “a long-term venture”, and a purchaser might make a loss if they sold the property within the first year.

One of her clients paid $389,000 for an off-the-plan apartment in Prahran about a year ago and tried to sell it at that price six months later with another agency. The property sat on the market for six months before it was relisted with Ms Farrell, who has the lowered the asking price to $369,000. The last sale in the block was $365,000.

Sam Nokes, head of property management at Jellis Craig’s Armadale and Richmond offices, said the issue of undercutting older apartments was made worse by rental guarantees on new developments.

“[Developers] might have a rental guarantee for $600 a week for 12 months, but they would rather get a tenant in at $500 a week and have a loss of $100, then try constantly for three months and have a loss at $600 through that time,” Mr Nokes said.