SQM figures show vacancy rates in Melbourne’s Docklands was running at more than 13 per cent in January. Central Sydney’s vacancy rate was more than 6 per cent. The rates are for all types of dwellings, but units dominate these markets.
Christopher is not expecting a reversal of inner-city vacancy rates for some time.
“Demand for inner-city property will remain affected by the closure of the international border as well as ongoing caution on [the possibility of] future city lockdowns,” he says.
Andrew Wilson, consultant economist at Archistar, says prices of some apartment markets could fall if landlords with vacant units who have been “hanging on the dear life” decide to sell.
He says investors thinking of coming into the market now would be better off looking at outer-suburban detached housing that have higher rental yields.
“It would really be a leap of faith to invest in [inner-city units],” he says.
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Grant Foley, a buyers’ agent and director of Grant Foley Property, says Sydney is a two-speed market, with house prices performing strongly and units “struggling”.
“However, not all units are created equal” and some would do better than others,” he says.
“Units that have an element of uniqueness and scarcity, such as an art deco [era] unit in a small block in a blue-chip suburb, would prove good investments,” Foley says.
