Some Melbourne districts are on the rise as investor hotspots. Find out where the opportunities lie for property managers. 

The property pendulum swings back and forth at different rates in every city and even every neighbourhood. If you’re growing a rent roll, it makes sense to be aware of which areas are on the up.

Recent investor statistics and insights, as shared by the team at Urbis, plus the latest Government initiatives are creating new opportunities for property and strata management agencies.  

Melbourne property: a macro overview

Factors influencing the property market in Melbourne at the moment are: 

• Consumer confidence, which is low because of interest rates and the cost of living

• Household savings, which have dropped below pre-pandemic levels

• Low unemployment (but an expected future increase)

• Construction costs limiting activity

While confidence is reported to be shaky right now, Melbourne's population growth is expected to be around 1.4 per cent over the coming years, which puts Victoria above average compared to other states in Australia. This will create a shortfall of 52,000 dwellings in the city over the next decade, and will keep rental property prices buoyant. 

Where will investors go?

Inflation and interest rates are forecast to ease as we enter 2025. A more settled economy and Melbourne’s expected progress to become the country’s largest city by 2031 (with a population of six million and two out of three residents arriving from overseas), will add to demand from buyers and investors. 

According to Urbis, Melbourne’s outer suburbs are expected to experience the biggest shortages in the near future. There is moderate demand in the postcodes clustered around the CBD and strong demand in districts to the east of Pakenham, north of Epping, and between Melbourne and Werribee. 

Meanwhile, the Victorian Government has shared a target to build 800,000 homes in Victoria over the next decade. This includes clear planning controls to deliver an additional 60,000 homes around 10 ‘activity centres’; Broadmeadows, Camberwell Junction, Chadstone, Epping, Frankston, Moorabbin, Niddrie (Keilor Road), North Essendon, Preston (High Street) and Ringwood. 

Opportunities for rent roll and strata managers

Melbourne’s population will need thousands of new homes over the coming decade but the Victoria Government has said the more a city sprawls, the less liveable it becomes for the people who call it home. For this reason, new high and medium-density apartment developments will help meet the demand for affordable and convenient housing.

The Government has explained it will create high-quality designs for 4 and 5 storey developments, and expand the areas where they can be used. It has also identified close to 80 under-used commercial office buildings and is considering opportunities to facilitate the conversion of these offices into around 10,000-12,000 apartments and mixed-use properties.

If you oversee a rent roll, it may be worthwhile to add strata roll management to your business’s skillset. This strategy can see you handed management rights to dozens, if not hundreds, of properties, all in the one location, as the preferred property management provider.

When you’re doing your research into the areas your agency could potentially expand to, consider infrastructure as well as housing developments. The areas which increase in popularity will give residents easy access to parks, schools, shops and transport. For example, the Government has explained priority precincts include Arden, Docklands, Fishermans Bend, Footscray, Parkville, Sunshine, Richmond to Flinders Street corridor. These precincts and suburbs are expected to deliver around 150,000 homes – with the opportunity for more to be built over time.

Keep an eye on taxes and levies

The final opportunity property management agencies can take advantage of is changes to short-stay accommodation regulations. 

The new Short Stay Levy will be 7.5 percent of the revenue of short stay accommodation platforms. Revenue raised will go to Homes Victoria, supporting its work building and maintaining social and affordable housing across the state.

There may be opportunities to contact short-stay accommodation providers and explain the benefits of relisting their investments as long-term rentals. If you can prove the numbers make better sense, you may be able to add to your rent roll.