In this article, we break down the top 10 suburbs for Melbourne property investors considering short-term rentals by property type (houses vs apartments) and seasonality.
Looking for a more detailed breakdown of Melbourne's short-term rental market in 2021? Click the link below to download a full PDF report:
Among Australia's most important and largest cities, Melbourne continues to show strong projected population growth and demand for accommodation over the next decade:
Like many major cities globally and across Australia, Melbourne’s property and short-term rental market has been heavily impacted by COVID-19 restrictions, outbreaks and lockdowns throughout 2020.
Average occupancy rates dropped from 74% in February 2020 to 42% in April as lockdown restrictions were imposed across the city.
As Victoria regained control of new COVID-19 cases and relaxed its strict social distancing rules from the start of 2021, bookings have rapidly increased to 58% in February and then achieved a post-pandemic high of 67% in March.
Occupancy rates on average are slightly higher for apartments than for houses, with two-bedroom properties being the most popular.
We've listed the top Melbourne suburbs for short-term rental property investors below, comparing Melbourne houses and apartments
(*Note: All Median prices are based on Realestate.com.au data, average occupancy rate is for 2018)
Brunswick is an increasingly dynamic and multicultural suburb bustling with charming cafes and art spaces like the Counihan Gallery.
The largely Victorian style homes and narrow streets are complemented by the newly built developments and an influx of young people making it the perfect mix of both old and new.
Brunswick is the most popular suburb for houses all year long. Occupancy rates generally increase in the summer, driven by multiple sporting and cultural events that take place during the warmer seasons.
Median House Price:
Occupancy Rate: 75%
Art deco homes along with immaculate Edwardian mansions and a strong sense of community is what distinguishes Northcote from other suburbs.
Neighbourhood festivals and art events take place throughout the year. All you have to do to join in on the fun is to head down the High Street and Northcote Social Club.
Median House Price:
Occupancy Rate: 81%
Luxurious bayside living against a backdrop of a picturesque beach is what defines the suburb of Brighton.
Head to the Brighton beach houses, an iconic tourist attraction, to enjoy a peaceful walk and grab delicious brunch with a view.
Also, boutique shopping along Church street and public golf courses make Brighton an attractive investment opportunity that draws visitors all year long.
Median House Price:
Occupancy Rate: 67%
Abbotsford is a bustling inner-city gem situated in the middle of Clifton Hill and North Richmond. The racing traffic of Hoddle Street is contrasted by the peaceful greenery of Studley Park.
The neighbourhood is enriched by the diverse mix of warehouse apartments and terrace houses along with hip cafes and arts precincts.
Median House Price:
Occupancy Rate: 79%
Albert Park offers relaxed living with the lingering smell of the fresh sea breeze and sights of little ducklings floating in the park lake.
Schools, trams, stunning shopping villages, and the city are all in close proximity and the tree-lined boulevards will win over heart instantly.
Median House Price:
Occupancy Rate: 72%
Fitzroy is a buzzing inner-city hub.
It is walking distance to the city or alternatively, you can easily catch the tram and ride past the perpetually lively streets filled with local bars, record shops, bookstores, and outdoor diner.
Median Unit Price:
Occupancy Rate: 77%
Convenience is key when it comes to Richmond. Major supermarkets, gourmet restaurants, and Asian grocers are all just a step away.
Richmond train station is a prime hub that can get you anywhere in the city hassle-free and you don’t need to worry about finding parking to enjoy a game at the Melbourne Cricket Ground.
Median Unit Price:
Occupancy Rate: 70%
Apartments and walk up flats are the predominant housing in Toorak, followed by single-family houses.
Median Unit Price:
Occupancy Rate: 71%
Whether you are a night owl or a morning bird, St Kilda can offer you the best of both worlds. Explore the trendy city bars at night and get fresh produce from the farmers markets in the weekends and if you enjoy a cycle along the nearby beach.
St Kilda can bring out the inner child in all of us as you're never too old to go on a Ferris Wheel joyride at Luna Park.
Median Unit Price:
Occupancy Rate: 73%
Collingwood is a hotspot for all things stylish and creative. It is evident from the plethora of vintage stores, art galleries, and music venues where you can dance to live band performances at the Tote hotel.
The occupancy rate in this suburb is equally high all year long for apartments and houses and hence, the pricing for both are displayed below.
Median Price House; Unit:
Occupancy Rate: 75%
In summary, Brunswick, Northcote, Collingwood, Brighton, Abbotsford, and Albert Park are the most popular suburbs for houses and Fitzroy, Collingwood, Richmond, Toorak and St Kilda are the most popular areas for apartments all year long.
This can be explained by the fact that the above-mentioned suburbs are touristic areas offering bars, restaurants, cafes, and shops, which could be the main reasons for tourists to visit Melbourne whether it is winter or summer.
However, it is imperial to note that although location, price, and seasonality are integral factors that determine the success of your short-term rental, additional factors such as housekeeping, guest experience, furnishing, and style are crucial.
