Chelsea Short-Term Rental (Airbnb) Market
Chelsea VIC Investment Analysis
HOLD
— 3.2% gross yield on a $1,100,000 median.
THE MARKET
Median house price in Chelsea sits at $1,100,000 with 30 days on market and a 0.7% vacancy rate. This is a tight rental market right now.
- **Median house:** $1,100,000 | **Units:** $439,449 - **Gross yield:** 3.2% | **Net yield:** 1.7% - **5yr price CAGR:** -6.3%/yr | **3yr forecast:** -7.1%/yr - **Population:** 20,156 | **Owner-occupier rate:** 31% | **Affluence:** High
- **Supply pipeline:** Moderate — Development activity consistent with long-term averages
RENTAL SNAPSHOT
- **Vacancy:** 0.7% (worsening) | **Rental demand:** Very High - **Median weekly rent:** $675/wk | **Days on market:** 30 (stable) - Landlord market — rents likely to keep rising.
SHORT-TERM RENTAL
- **Median nightly rate:** $175/night | **Occupancy:** 66% - **Estimated annual STR gross:** ~$42,158/yr - **vs long-term rent:** $35,100/yr (+20% STR premium — factor in higher management costs)
INFRASTRUCTURE & CATALYSTS
- No major confirmed infrastructure projects on record. - **Transport:** Well-connected inner-city location
BULL CASE
If Chelsea maintains 3%+ annual growth and vacancy stays below 0.8%, median prices could reach $1,265,000 within 3 years with yields compressing slightly as capital values rise.
BEAR CASE
A market correction or interest rate shock could see prices in Chelsea pull back 10-15% from $1,100,000, with vacancy rising to 1.3% and rental yields softening as tenants gain leverage.
KEY RISKS
- Negative price growth suggests a softening market
COMPARABLE MARKETS
- **Ferntree Gully** (VIC): $886,000 median, 0.0% yield, 0.0% 1yr growth - **Ferny Creek** (VIC): $1,037,300 median, 0.0% yield, 0.0% 1yr growth - **Flemington** (VIC): $1,014,500 median, 0.0% yield, 0.0% 1yr growth
THE PLAY
Chelsea offers balanced fundamentals but does not present an urgent buying signal. The market is in a trough phase with low vacancy risk. Monitor vacancy trends and price movements over the next 6-12 months. Only enter if a property can be acquired at or below median pricing with yields exceeding 4.0%.
- Entry range: $990,000 – $1,210,000 - Minimum gross yield to target: 4.5% - Watch signal: vacancy staying below 2% and days on market holding under 35
This analysis is for informational purposes only and does not constitute financial, legal, or investment advice. Seek professional advice before making investment decisions.
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Analyse a Property →Data sourced from ABS, state government property sales, and Airbnb market analytics. For informational purposes only — not financial advice.