South Melbourne has had a A very good year for property investment returns compared to the rest of VIC, giving investors a capital gain of 27.39% to date .
Over the longer term, South Melbourne has seen property prices show investors a 7.14% return over the last 3 years. This is an improvement over the last 12 months
Using the current median advertised rental of $680 and the average annual increase in value of a median property of 6.35%, investors should hope to achieve an overall return of 2.36%
Over the last year, property investments in South Melbourne, 3205 have given investors a capital gain of 2.19%. This compares badly with the 6.63% for VIC as a whole.
South Melbourne,3205 has offered an average of 2.19% return per annum in house price rises to property investors over the last three years.
When looking to buy, or assessing what properties are really achieving at sale, it's essential for property investors to take into account what discounts are being offered in South Melbourne, 3205. Typically our figures indicate that -5.24% is being offered, which puts this VIC suburb at 607th most discounted overall in Australia.
South Melbourne, 3205’s gross rental yield is 4.73%
Information supplied by:
South Melbourne, VIC
Median House Price: $1,175,000
Current Yield (houses): 3.1%
Average annual growth (houses): 5.0%
Median Unit Price: $591,400
Current Yield (units): 4.7%
Average annual growth (units): 2.2%
With the national decline, South Melbourne had suffered alongside the capital city as auction clearance rates plummeted in the first few months of 2019. However, the suburb’s fortunes have turned around very quickly.
“Auction clearance rates in early 2019 for houses in South Melbourne were down to 50%, but towards the end of 2019 they’d risen back up to over 75%,” reports Jeremy Sheppard, head of research at DSR Data and LocationScore.
This has much to do with property supply levels staying low during the down period, which helped sustain high levels of demand.
“Prices have retracted about 30% over the last two years, presenting what buyers now consider to be bargains. Moreover, supply is tight, with the percentage of stock on market never rising above 1% for the last three years,” he says.
The rental market has been extremely tight as well, causing rent rates to shoot up to the benefit of investors who are able to reap an average return of 4.7% from units.
“Vacancy rates have been consistently low for houses over the last couple of years at around 1%. That has placed pressure on rents which have climbed over 7% in the last year,” Sheppard concludes.