Docklands real estate defies market gloom

The past three years have been described as the most turbulent period in Melbourne’s real estate history. 

In October, the Reserve Bank of Australia (RBA) forecasted a property price drop of 1.5 per cent each month to finish off the year; and, according to the nation’s central bank, the picture doesn’t look much brighter in 2023. 

Docklands News spoke with three of the area’s top agents – Baden Lucas from Lucas Real Estate, Glenn Donnelly from City Residential and Geoff White from Barry Plant – to get an understanding of the state of play with regards to property prices. Their response was unanimous; despite volatility as a direct result of rising interest rates, Docklands’ property market continues to defy market expectations. 

According to Mr Lucas, director of Docklands’ top performing agency, there are two key drivers when it comes to new sales in the area: first home buyers and tower jumpers.

“What is most interesting is that the first home buyer traditionally had anywhere between $450,000 to $600,000 to spend on property, but right now they have anywhere between $450,000 and even $1 million to spend on their first property,” Mr Lucas said. 

“Tower jumpers are people moving between buildings, are local to apartment living, or are renting as a first home buyer. We are seeing a lot of activity in this space with people watching new listings carefully and jumping on opportunities.”

“Value for money, the liveability of any of the precincts in Docklands is unbelievable. When you think about what $600,000 to $700,000 buys you outside of the city, you would need to drive an hour.”

Mr Lucas told Docklands News there has been a significant shift in the demographic of individuals purchasing in Docklands, with 88 per cent of sold properties through Lucas Real Estate during the past 12 months in Victoria Harbour and NewQuay alone, going to owner-occupiers. 

“The people who are buying here is such a positive story. With the opening of Docklands Primary School, we are seeing a huge number of young families move into the area, particularly in NewQuay and Victoria Harbour,” Mr Lucas said.  

“Probably the one box we don’t tick is immediate health access, which is definitely an area we would welcome some investment from developers.”

With the frenzy of property price increases of early 2022 behind us and falls being experienced throughout the wider property market since then, dwelling prices in Docklands, contrary to popular opinion, have increased by 3.5 per cent during the past 12 months, according to Barry Plant’s, Geoff White. 

“It has gone from a strong seller’s market to more of a balanced market now,” Mr White said. “You don’t want unsustainable growth and craziness in the market, you want something that is stable going forward, and I think we have it right now.”

“Each precinct in Docklands, whether you are in NewQuay, Victoria Harbour or Yarra’s Edge, are seeing great results with clearance rates across the suburb sitting at 70 per cent, meaning seven out of 10 properties sold on the day under the hammer.”

“We are seeing a real mix of buyers, which we had never seen before. Some people buy on price, some buy on views, others buy for convenience to services. If you want to buy on price, then you are probably best to look at NewQuay or Victoria Harbour, however, if you are buying for lifestyle Yarra’s Edge comes into the conversation: each precinct has their own distinct benefits.”
“Unfortunately, the media loves looking at the negative view that property prices are beginning to fall, but we are seeing steady growth in Docklands despite the bad press.”

According to our three agents, Docklands’ rental market is on the up with rental yields sitting at an average of 4.8 per cent, which sees a gradual realignment with pre-pandemic levels.  

Landlords will typically gain the best rental results with one-bedroom apartments returning anywhere between five and five-and-a-half per cent, two-bedroom apartments will fetch you four-and-a-half to five per cent returns, and three-bedroom apartments between three and four per cent depending on the property. 

City Residential director, Glenn Donnelly said in his 15 to 20 years working in Docklands’ property market there had been few greater periods for renter and buyer interest.

“Rental prices are back to pre-COVID levels, which has improved a lot quicker than any of us in the industry were thinking,” Mr Donnelly said. “We advertise a property for rent, put it on the market, and it will be snatched up straight away.”

“We are seeing a lot of new purchasers dipping their toes in the market by renting for six or twelve months before buying in the area; that way they can get a taste for the suburb.”

“We are also seeing the international and domestic investor market return, with those who left starting to come back again, and as of January and February, there will be another big influx of international students again.”

While Docklands may not have the clickbait appeal of other markets where you will see properties sell for $200,000 over reserve, it continues to buck market trends and raise its hand as an emerging blue chip real estate suburb. •

Caption: L-R: Baden Lucas from Lucas Real Estate, Glenn Donnelly from City Residential. and Geoff White from Barry Plant.