Recently, the leasing market has become even more competitive, with increased demand from renters driving higher rental yields and property values. Investors are capitalising on these conditions, recognising the potential for both short-term rental returns and long-term capital growth. With a steady influx of new properties, strong tenant interest, and low vacancy rates, the South Bayside region continues to be a hotspot for property investment.

A Thriving Investor Market

The leasing market in Melbourne’s South Bayside suburbs has strengthened significantly since the start of the year. Increased demand from renters has resulted in a tighter market with more competitive conditions. Investor sentiment remains positive, with many capitalising on favourable market conditions and rising rental rates to expand their portfolios.

Primarily local investors are entering the market, focusing on residential properties such as family homes and townhouses, particularly in sought-after locations with strong rental yields and close proximity to essential amenities.

Our offices have observed a steady influx of investors and properties, with an average of 15-20 new properties entering the market each month and approximately 30-40 properties turning over with new renters. The vacancy rate has dropped to 2-3 percent, indicating a robust market with swift leasing activity. Inquiry levels have increased, with many properties receiving multiple applications per listing. Open inspections are well attended, with homes often leased after the initial viewing. This highlights the competitive nature of the current rental market and suggests that rental prices will remain steady in the coming months.

Rental Price Growth Continues

Rental prices in the Bayside region have risen by more than 15 percent compared to last year. This upward trend is expected to continue as demand remains high. For example, a two-bedroom unit that was renting for $425 per week last year is now achieving over $500 per week.

The most sought-after properties include modern two and three-bedroom family homes with outdoor spaces, particularly those close to public transport and recreational areas. These features appeal to a broad range of tenants, contributing to competitive leasing conditions.

In August, Chelsea had 38 properties available for rent and 63 properties for sale, according to realestate.com.au. The median price for houses over the past year was $1 million, while units had a median price of $715,000, achieving an annual compound growth rate of 12.4 percent. Houses in Chelsea currently rent for $617 per week, offering an annual rental yield of 3.2 percent, while units lease for $500 per week with a rental yield of 4.2 percent.

A Lifestyle Destination for Investors and Renters

Melbourne’s South Bayside region continues to attract investors and renters due to its appealing lifestyle offerings. The area boasts picturesque beaches, parks, and vibrant community amenities, making it an attractive location for families and professionals alike. Additionally, the region features quality schools and ongoing infrastructure improvements that enhance its long-term investment potential.

With a combination of affordability and strong prospects for capital and rental growth, the South Bayside suburbs remain a prime choice for property investors looking to secure high-performing assets in Melbourne’s competitive market.