Docklands VIC Property Investment

THE MARKET

Docklands has compounded at 1.3%/yr over 5 years — a house that cost $1,954,604 in 2021 is worth $2,085,000 today. Properties are sitting on market for 40 days (roughly balanced conditions). At the same growth rate, today's median reaches $2,224,095 by 2031.

- **Median house:** $2,085,000 | **Units:** $530,000 - **Gross yield:** 1.7% | **Net yield:** 0.2% - **5yr price CAGR:** 1.3%/yr | **3yr forecast:** 1.4%/yr - **Population:** 15,495 | **Owner-occupier rate:** 30% | **Affluence:** Very High

- **Supply pipeline:** Moderate — Strong population growth likely attracting new development approvals

RENTAL SNAPSHOT

- **Vacancy:** 3.5% (stable) | **Rental demand:** Low - **Median weekly rent:** $680/wk | **Days on market:** 40 (stable) - Tenant market — vacancy elevated, negotiate hard on rent.

SHORT-TERM RENTAL

- **Median nightly rate:** $175/night | **Occupancy:** 65% - **Estimated annual STR gross:** ~$41,519/yr - **vs long-term rent:** $35,360/yr (+17% STR premium — factor in higher management costs)

INFRASTRUCTURE & CATALYSTS

- **Metro Tunnel (Melbourne)** (Under Construction) - **West Gate Tunnel (Melbourne)** (Under Construction) - **North East Link (Melbourne)** (Under Construction) - **Suburban Rail Loop East (Melbourne)** (Under Construction) - **Transport:** Well-connected inner-city location

BULL CASE

If Docklands maintains 8%+ annual growth and vacancy stays below 2.4%, median prices could reach $2,397,750 within 3 years with yields compressing slightly as capital values rise.

BEAR CASE

A market correction or interest rate shock could see prices in Docklands pull back 10-15% from $2,085,000, with vacancy rising to 5.0% and rental yields softening as tenants gain leverage.

KEY RISKS

- Above-average vacancy rate (3.5%) indicates rental oversupply risk - Premium price point limits buyer pool and increases interest rate sensitivity

COMPARABLE MARKETS

- **Albert Park** (VIC): $2,675,000 median, 1.9% yield, 8.7% 1yr growth - **Alphington** (VIC): $1,603,500 median, 2.8% yield, 14.5% 1yr growth - **Armadale** (VIC): $2,267,500 median, 1.9% yield, 4.7% 1yr growth

THE PLAY

Docklands presents a compelling investment opportunity. The combination of solid fundamentals and low rental demand supports entry at current price levels. Proceed with due diligence on specific properties. Target gross yields above 1.7% and prioritise properties with value-add potential. Consider timing entry around the current recovery phase of the market cycle.

- Entry range: $1,876,500 – $2,293,500 - Minimum gross yield to target: 4.5% - Watch signal: vacancy dropping below 2% and days on market falling below 35

This analysis is for informational purposes only and does not constitute financial, legal, or investment advice. Seek professional advice before making investment decisions.