In a Melbourne Frame of Mind

The Victoria capital steps into the spotlight to challenge Sydney for investment dominance in Australia

Melbourne needs little introduction. It’s an Asia Pacific hub of business, arts, culture and education, a city with an extremely high standard of living and a place everyone wants to live if immigration patterns are accurate. It has its competitors in Australia: Sydney has its following as the country’s business centre; Brisbane is a rapid grower and the Gold Coast has some of the world’s best beaches for its lifestyle appeal. But Melbourne’s combination of all of the above has made it the investors’ choice for the past four years – a trend that’s unlikely to end soon.

Central Melbourne is in the grips of a construction boom, with another A$42 billion worth of projects – predominantly residential developments – on the horizon, according to Savills Australia.

Though it’s likely to kick off a new wave of international investment, Savills predicts new arrivals underpinning the city’s population growth and overseas students will take most of the space.

Nonetheless, there are rumblings of market dampening oversupply. Michael Emery, founder and principal at boutique developer Portal Properties in Melbourne, disagrees.

“The argument that Melbourne is facing an oversupply of new apartments is grossly exaggerated, oversimplified and generally communicated without adequate evidence or justification,” he argues, citing government forecasts that estimate Melbourne’s population will double to nearly nine million by 2051.

New infrastructure is at the heart of Melbourne’s growth, providing the framework upon which investments from other parts of Australia and around the world have been incentivised.

Melbourne Metro Rail, Melbourne Park Redevelopment and the Flinders Street Station upgrade are just a few.

A low Australian dollar also helps attract investors, and August research by Savills reiterated: “The most significant drivers for international investors were Melbourne’s rapid population growth, it’s most liveable city status, and its nation-leading overseas student/education sector, while the combination of stable government and a relatively safe social environment were additional factors which added up to a very sound investment CV.”

Melbourne is a city of neighbourhoods: historic Carlton, the hip Collingwood and Fitzroy, the revitalised Richmond, the modern Docklands and the upscale South Yarra.

One of the fastest emerging is South Melbourne, a leafy enclave noted for its artisan culture, Victorian mansions and urban renewal at Fisherman’s Bend.

“This part of inner-urban South Melbourne, which has been recently rezoned from a light industrial use to permit residential and commercial uses, was recently rezoned in recognition of the need for further housing in close proximity to the CBD and transport links,” explains Emery, whose 20-storey Vivid181 will soon grace the cityscape in the rejuvenating district.

Next issue: An introduction to South Melbourne

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