Is Melbourne becoming a landlord’s market?
Key research released this month suggests that Melbourne is continuing to show significant potential for property investors, and has actually become a ‘landlord’s market.’ These findings come hot on the heels of the Victorian government’s vacancy tax announcements and amidst concerns of apartment oversupply in inner-city Melbourne. The following five reports outline why many investors are still keeping Melbourne on their watch list.
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Melbourne’s property vacancy rate drops to near 10-year low
Only 1.7 per cent of the properties being offered for rent in inner-city Melbourne remained available in February, according to SQM Research. The last time this figure was so low was in June 2007.
“This is quite remarkable – despite predictions of looming apartment oversupply in inner-city Melbourne, we are seeing vacancies fall rather than rise. At this point in time, there’s not an oversupply of rentals. If anything, it’s turned into a landlord’s market,” said SQM Research Managing Director, Louis Christopher
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Massive 128% Rise in CBD Leasing
Recent research report from Savills have revealed office leasing in Melbourne’s CBD has had a massive increase of 128 per cent over the 12 months to March.
According to Savills Director, Office Leasing, Phillip Cullity, this surge is the result of strong population growth as well as the Victorian Government’s strong infrastructure program, including level crossing removals, the Metro Tunnel and the Western Distributor.
“It’s no surprise that developers are pushing ahead with new buildings especially with economic rents being achieved,” Cullity said.
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Development booms as Melbourne population grows
“More and more people want to live in Melbourne, which is reflected in the record number of homes being built. The number of dwellings completed or in the pipeline is one of the highest we have recorded since the DAM began in 2002,” said Lord Mayor Robert Doyle, reflecting on the City of Melbourne’s latest Development Activity Monitor (DAM) report.
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Work ramps up on major train and road infrastructure projects
From 1 April 2017 drivers heading to or from the CBD on CityLink between Flemington Road and the West Gate Freeway will now have an additional traffic lane available each way, including the Bolte Bridge. On average, motorists will save 16 minutes in the morning peak and 17 minutes in the afternoon peak when the CityLink Tulla project is completed in 2018.
Work is also set to ramp up next month on the $10.9 billion Metro Tunnel mega-project which will enable more trains to run in and out of the city to improve access to jobs, education, health and culture. Construction will continue at Franklin and A’Beckett Streets in April, and in and around St Kilda Road at Domain.
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New Council development to deliver $87.9M public benefit
The City of Melbourne last week unveiled plans for what has been described as Australia’s most sustainable mixed-use development on the Council-owned Munro site, as part the Queen Victoria Market (QVM) Precinct Renewal.
Lord Mayor Robert Doyle said the proposed development by PDG Corporation would deliver a $89.7 million public benefit to the City North precinct. It will include a hotel, residential and retail, childcare facilities, health and community hubs as well as galleries and artist spaces. The development will move the existing QV market car parking underground and transform the space into 1.5ha of public amenity.