'Balanced market' tipped for CBD, Southbank and Docklands
Healthy demand expected from homebuyers as investors sell off
Listings of city apartments should continue to rise in early 2024, meeting the demand from downsizers as well as first-home and lifestyle buyers.
It should be a case of “more of the same and a balanced market” in the first half of the new year, according to Barry Plant Yarra Edge branch manager Geoff White, a former REIV president.
“Employment is still strong, and if interest rates are stable and more people return to the city, the market for sales and especially rentals should do well,” he said.
“We have also seen people selling up their holiday homes for a new city lifestyle while upgraders seek better quality apartments in good areas.”
The market’s strong showing in the latter half of 2023 would likely continue into the new year.
“2023 was a good year for our offices with healthy buyer activity and the increase in listing numbers because many investors sold in the city,” Mr White said.
“Stock levels in January have risen, but we expect buyers to remain active, with demand especially from people seeking a city lifestyle, first-home buyers and downsizers.”
Mr White noted the city’s apartment market was not uniform and that performance would depend on the area and property type.
Prices were generally stable in 2023 with quality and spacious apartments doing well, with sellers seeing price rises of 1-3 per cent.
It was a seller’s market in 2021-2022, and in 2023 it turned into a buyer’s market as many investors sold due to rising costs from interest rates, compliance issues and other charges, Mr White said.
“We expect the market to be stable in 2024,” the industry veteran added.
Investors generally shied away from the city in 2023 with only properties with high yields attracting such buyers.
The rental market should tighten further as investors continue to sell up, with the decline in rental supply putting price pressure on renters.
The median unit price in Docklands was $615,000 in the 12 months to December 2023, according to realestate.com.au data.
There were 529 unit sales over the period and demand was strong with 4153 buyers interested. The suburb had 324 properties available for rent and 282 properties for sale as at January 11.
Meanwhile, Docklands houses rent out for $1,050 per week with an annual rental yield of 4.1 per cent, while units fetch $650 a week with a 5.7 per cent rental yield.
The supply in Southbank was strong, with 610 properties for rent and 407 for sale. The median unit price was $599,000 and units lease for $620 a week with a yield of 5.8 per cent.