Caution urged over Melbourne's Docklands
Investors should remain cautious despite recent improvements in Docklands' property market, warns SQM Research’s managing director Louis Christopher.
While vacancy rates tightened from 6.6 per cent to 6 per cent over the month ending March, Mr Christopher told Smart Property Investment that this is a short-term trend in what has been a long-term upward trend.
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“It does look like there’s been a bit of an improvement in recent months for sure,” he said, yet added that the steady upward trend of stock on market numbers since 2009 would make him cautious.
Like Melbourne’s Southbank, Mr Christopher believes Docklands suffers from an oversupply of apartments, cautioning investors not to buy in the area "unless they can pick up an absolute steal".
Michael Baliviera, state franchise manager of Raine and Horne Victoria, agreed that the massive volume of building in the area is an issue, but believes Docklands still offers opportunities with above average rental returns.
“There’s quite a few towers going up, so that tends to slow the capital growth, but rental return is very high,” Mr Baliviera said.
With apartment living becoming more popular, Mr Baliviera believes there is still a demand for the supply, and that a slow down in building activity will reduce supply issues.
