Docklands in Melbourne is often regarded as an over-supplied, no-go zone for investors, but is the market really as dire as some are saying?
Blogger: Glen Lucas, managing director, Lucas Real Estate
Often the subject of media controversy and outdated property myths, Melbourne’s Docklands precinct is no shrinking violet, with investors reporting above-average rental yields and some of the lowest vacancy rates in Melbourne’s inner region.
Here are the top five Docklands property myths debunked for would-be investors:
Myth one: Docklands property prices are in decline
The real estate industry of Victoria has reported a steady increase in Docklands’ median property prices since September 2012, with median property prices increasing by over $4,200 per month to currently sit at $625,000, representing a 116 per cent upwards growth trend*.
Myth two: Docklands has one of the highest vacancy rates in Melbourne
Lucas Real Estate recently released a report stating Docklands investors are witnessing above-average tenancies with vacancy rates down to 1.92 per cent compared to Melbourne’s 2.4 per cent*.
The lifestyle and commuting ease had made the suburb a hotspot for long-term, quality tenants.
Myth three: Docklands is impossible to get to
As one of the most walkable and connected communities in Melbourne’s fringe, Docklands is serviced by:
- Five tram routes as well as the free City Circle Tram
- The Melbourne visitor shuttle bus
- Four major bike/pedestrian paths
- Southern Cross Station
- An abundance of private water-taxi services
- Ample public berths for private charter boats
- For those looking to drive into Docklands, there are over 5,000 parking spaces available from just $6 a day**
Myth four: Docklands investors aren’t earning returns
Investors are currently witnessing above-average financial yields with annual returns of up to 6.4 per cent per annum compared to Melbourne’s 5.8 per cent return***.
At the moment we seem inundated with Sydney investors keen to snap up affordable waterside investments that offer a strong financial return.
The suburb’s population has grown by over 20 per cent in the last five years1 to just under 10,000, so this, coupled with the lifestyle, location and abundant employment, recreation, waterfront and entertainment amenity, has created a perfect storm for investors who are now seeing impressive returns on their Docklands portfolio as demand for quality rental properties continues to rise.
Myth five: There’s nothing to do in Docklands
As one of the largest suburban renewal projects in Australia, Docklands is shaping up to be one of the most social suburbs in Melbourne.
Docklands currently offers:
- 42 artwork installations across its parks, promenades and public spaces
- Walking tracks that circle Victoria Harbour’s entertainment and lifestyle precincts
- New library complete with interactive multimedia sections
- Harbour Town Shopping Centre
- Melbourne Star observation wheel
- Stunning waterfront event spaces: Atlantic Group’s converted warehouses ‘Shed 9’ and ‘Shed 14’, Alumbra and Waterfront Venues Melbourne
- Dozens of cafes, bars and restaurants – with cafes Hortus and Long Shot listed in the Top 10 Coffee Spots in Melbourne by The Age Good Cafe Guide’s Matt Holden
- Black-light mini golf
- Ice skating, and so much more
And with talks of creating more public amenity along the harbour, Docklands is the perfect location to socialise and unwind.
*REIV – data accessed August 2014
***RP Data, March 2014 http://blog.rpdata.com/2014/03/melbournes-highest-yields-distance-city/
1 ABS Regional Population Growth 2008-2009
About the Blogger
With a career spanning over 30 years real estate, Glen Lucas first started selling real estate in Docklands back in 2000 when the first stage of the progressive redevelopment was released off-the-plan.
Glen established Lucas Real Estate soon afterwards in 2004 and has spent the past decade working with local owner-occupiers and investors to become the number one Docklands real estate agency through two high profile office locations.