According to the Department of Human Services in Victoria, an investment property in metropolitan Melbourne in 2015 produced a median rental income of $380 per week, which is a 2.8 percent rise from 2014. As an investor in luxury rental property in Melbourne, you could experience an average rise in rental income of $8 to $10 per year, and that’s just based on average weekly rent.
Regional Melbourne Rental Statistics
Knowing the facts about luxury rental trends in Melbourne and surrounding suburbs will give you a better idea of why investment in luxury rental apartments will prove to be a sound financial decision.
A report completed in 2015 by the Department of Human Services in Victoria shows that in the September quarter of 2015, investors in Victoria were lent up to $10.55 billion. There has been a 9.5 percent increase in the lending to investors since the same quarter in 2014. This is a clear indication that more and more people are seeing the benefits of investing in apartments in Melbourne.
But where are people investing, and in what kind of apartments are they investing in?
According to the same report, Southeast Melbourne and Inner East are showing clear rises in lettings in 2015. Places like Malvern and Stonington are offering higher quantities of lettings, with Southeast Melbourne lettings at 3,182, a 4.6 percent increase from the year before.
In these parts of Melbourne, the availability of affordable rental units is less than 5 percent, but that hasn’t stopped the quarterly turnover rate for metropolitan Melbourne from reaching 9.7 percent in 2015. Annual average rents for three bedroom houses in neighbourhoods like Malvern and Albert Park increased by 16 percent and 8.6 percent, respectively.
For example, the highest median weekly rent for a 2 bedroom flat in the CBD on St Kilda Road is around $525. Three bedroom houses around Albert Park, Middle Park and West St Kilda are costing as much as $863 per week on average.
Better Land Investment than Buying a Home
Years have gone by with many investors stubbornly following old real estate practices. The common idea is that buying a home in the suburbs or in the country is a better investment than buying an apartment in a more urban location. The logic behind this is that you’re buying more land with your home than you would with an apartment. However, after considering the higher cost of construction compared to the lower value of the land, the asset (the land) that appreciates is much smaller. When it comes to buying an apartment in a sought-after location, you’ll own a small bit of very valuable land, rather than a large piece of low-value earth.
Why Renters Choose Luxury
High-end renters want features that make a home on a grand scale, like concierge service and the best amenities, all in a location that’s close enough to the city. Luxury units are more in step with the busy, cosmopolitan lifestyle of many young urban professionals, who want to be located close to their work, shopping areas, trendy cafes and restaurants and a great nightlife.
A Place for You to Relax
Having a luxury condo in your name is a great option to have should you ever need a place to stay. It is a place for you to live in the future if you choose to make a life change, or it is a place for your child or family members to stay. Either way, having a second home in your name is truly a sign of being a wise investor. Enjoy the property while its value grows exponentially.
For more information on investing in luxury apartments, contact EBG Developments. We are the best high-end developers in Melbourne.