Vacancy rates in the Melbourne CBD and Southbank have dropped below 2 per cent as students, retirees and young professionals return to the city, after peaking at over 11 per cent during height of the second Victorian lockdown in 2020, new figures from Melbourne Inner City Management (MICM) show.
The plummeting vacancy rate has swung these two key high-rise apartment markets back in favour of landlords, given 3 per cent is considered a balanced market by most residential property professionals.
MICM, which is part of prominent developer Central Equity’s group of companies, manages the largest apartment portfolio in Southbank and one of the biggest in the Melbourne CBD. It equates to “many thousands” of rental units, many of them developed and built by Central Equity.
Darren Blankfield, a director at MICM, said inner-city apartment vacancy rates had spiked during each lockdown – especially during the first two in 2020 – as traditional tenants such as workers and students vacated and the usually deep pool of international renters dried up.
But as Victoria exited its sixth lockdown in October last year and – supported by high vaccination rates – adopted a “living with COVID” approach, they began to fall, approaching a balanced market by the end of 2021.
“Towards the end of 2021 we saw extremely strong application numbers for vacant properties,” Mr Blankfield said.
“This is what we expect in a balanced market and highlights the bounce back and upward pressure on inner-city market rents.”
The low vacancy rate across the MICM portfolio is reflective of wider trends in housing markets, since the ending of strict lockdowns on the east coast.
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