With a new master plan for the Docklands, soaring building permits, and intensifying demand for inner city rental properties, Melbourne and Victoria are presenting new possibilities for inner city living as well as property investment. We take a closer look at the latest exciting property trends in Melbourne.
Dockland’s $700m Master Plan
Melbourne’s Docklands will see a further expansion plan which will bring in five new buildings, new retail spaces, and public spaces such as a major public park. The plan also incorporates residential living spaces and a large hotel. The development will take place on the ING Waterfront city land that sits between Docklands Drive and Victoria Harbour.
- The five buildings will be delivered over the next four years.
- The new project will add 2,000 new residents, hotel guests, and workers to the Docklands precincts.
- The new park will be one of the largest green and open spaces in the area. It will feature a pavilion and offer casual food and beverage services.
- The new project is expected to address the need for more green spaces, more outdoor shelter, and bring very high quality building types to the area.
Rental Vacancy Easing, But Inner City Renters Still Feeling the Pressure
While Melbourne’s rental vacancy rates has improved for the July period, rental vacancy remains very low in the inner city suburbs.
- Overall rates. The overall rental vacancy rate increased from 2.2 per cent to 2.5 per cent, an improvement from the annual average of 1.75 per cent for the year to July 2011.
- Factors. The Real Estate Institute of Victoria (‘REIV’) suggested that a slight slowing down of the rate of population growth combined with the construction of new residential dwellings has led to the slight easing.
- Outer suburbs. The highest vacancy rates were observed in outer suburbs, where 3.2 per cent of homes were vacant, up from 2.1 per cent in the June period.
- Middle suburbs. The middle suburbs also saw an improvement from 2.1 per cent in June to 2.6 per cent in July.
- Inner city. Rates did not ease in the inner city suburbs where vacancy dropped from 2.4 per cent to 2.2 per cent, suggesting that the inner city areas were the best places for sourcing investment property.
Soaring Building Permit Activity in Victoria
Victoria has also been experiencing some of the highest levels of building permit activity, reaching $2.2 billion in July 2011. This represents the second highest start of any financial year in history, just behind the $2.3 billion recorded for the July 2010 period.
Despite the slight easing, four of the seven categories experienced increases.
- Residential. Residential building activity rose 55 per cent in the year to July 2011.
- Hospital/Healthcare. Building activity in the Hospital/Healthcare category surged by 35 per cent from July 2010.
- Retail. Retail building activity grew by 83 per cent to $159 million.
- Industrial. Building activity for the industrial category also grew by 17 per cent for the year.
- Inner Melbourne. On a region basis, inner Melbourne building permits grew by 8 per cent to $923 million in the year to July 2011.