Prahran VIC Property Investment

THE MARKET

Median house price in Prahran sits at $1,600,000 with 26 days on market and a 2.0% vacancy rate. This is a balanced market right now.

- **Median house:** $1,600,000 | **Units:** $550,000 - **Gross yield:** 2.5% | **Net yield:** 1.0% - **Vacancy:** 2.0% (worsening) | **Rental demand:** High - **5yr price growth:** -1.7%/yr | **3yr forecast:** -1.9%/yr - **Days on market:** 26 (stable)

STR potential: $210/night at 70% occupancy = ~$53,655/yr gross. That's a **32% premium** over long-term rent — but factor in higher management costs and council rules.

BULL CASE

If Prahran maintains 3%+ annual growth and vacancy stays below 1.4%, median prices could reach $1,840,000 within 3 years with yields compressing slightly as capital values rise.

Notable infrastructure: **Bangs Street, Prahran Housing Development** (completed). Plus 3 more projects in the pipeline.

BEAR CASE

A market correction or interest rate shock could see prices in Prahran pull back 10-15% from $1,600,000, with vacancy rising to 3.6% and rental yields softening as tenants gain leverage.

WHAT TO DO

Prahran presents a compelling investment opportunity. The combination of solid fundamentals and high rental demand supports entry at current price levels. Proceed with due diligence on specific properties. Target gross yields above 2.5% and prioritise properties with value-add potential. Consider timing entry around the current correction phase of the market cycle.

- Entry range: $1,440,000 – $1,760,000 - Minimum yield to target: 4.5% - Watch signal: vacancy dropping 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.