Southbank Suburb Insights: September 2021

The Urban Developer’s latest suburb profile focuses on Melbourne’s riverside suburb of Southbank.

The suburb is one of the city’s fastest-growing locations with a broad range of modern apartment buildings and new pockets emerging including South Wharf and Freshwater Place.

This resource, to be updated regularly, will collate and examine the economic levers pushing and pulling the suburb’s property market.

Combining market research, rolling indices and expert market opinion, this evolving hub will act as a pulse check for those wanting to take a closer look at the movements across the market.


Southbank, which covers approximately 1.6 square kilometres, is Melbourne’s fastest growing suburb and the most densely populated. It is home to more than 18,000 residents, 45,000 workers and 80,000 visitors every day.

The population of Southbank in 2011 was 11,200 people. During the last census a population of 18,700 was recorded, an increase of 66.5 per cent.

Households in Southbank are primarily childless couples and are likely to be repaying between $1800 and $2399 per month on mortgage repayments. The predominant age group for the suburb is 20 to 39 years.

In 2011, 39.7 per cent of the homes in Southbank were owner-occupied compared to 33.8 per cent in 2016, according to the Australian Bureau of Statistics.

Southbank median price change

^Source: Corelogic

While Southbank is Melbourne’s fastest growing suburb, apartment building in Melbourne seems set to plummet, with experts tipping the number of units completed across Victoria to plunge from more than 16,000 this year to just 800 in 2024.

With lead-in times for a large apartment complex of up to five years, Charter Keck Cramer forecasts that in 2024 Victoria will build just 4 per cent of the number of apartments completed at the sector’s 2016 peak, when 19,400 were built.

The present glut of apartments in central Melbourne, a result of the Covid-19 crisis, looks set to turn into an acute city-wide shortage in coming years.

Rental vacancies in central Melbourne have soared to 8.4 per cent—twice the rate of the broader metro region—with desperate landlords cutting rents to below the levels of 10 years ago.

Median prices

Dwellings0.1%▲-0.4%▼3.6%▲ $545,467▼
Units0.1%▲-0.4%▼3.6%▲ $545,166▼

^Source: Corelogic

Apartment prices too have tumbled, but not as dramatically as rent prices.

In Docklands, the median unit price was down 3.6 per cent in the 12 months to March. In Southbank it was down 3.1 per cent to $543,000 and in the CBD the fall was 1.4 per cent to $457,450.

Southbank’s residential market had reverted to stability during the past 12 months, despite a mass exodus of the prominent student housing market and other factors such as issues with combustible cladding and a lack of interstate migration.

That market stability has come in the form of first home buyers eager to make hay with stamp duty savings and concessions, many of whom had been renting in Southbank and were now ready to enter the market.

Unit price rises and falls – Melbourne

RegionMedian unit price QoQYoY
South East $505,000 5.40%2.40%
Outer East $650,000 3.50% 8.30%
Mornington Peninsula $558,000 2.40% 18.70%
Inner$581,500 1.10% 2.00%
Inner South $659,000 -0.30% 4.90%
West$473,250 -1.30% 5.60%
North East $560,000 -2.60% 8.50%
Inner East $655,000 -3.70% -1.50%
North West $515,000 -6.40% -3.70%

^Source: Domain House Price Report, June quarter, 2021.

What the experts are saying about Southbank

Eliza Owen, Head of Research, Corelogic

Eliza Owen
Head of Research

“The inner Melbourne unit market has been one of the few weak pockets of the housing market amid an otherwise fairly broad-based upswing.

“This is because inner city markets like Southbank previously had high exposure to overseas migration arrivals, such as international students.

“In the three years to June 2019, the Inner Melbourne region saw an average net international migration level of around 19,000 additional people per year, so the ongoing closure of international borders has weighed heavily on rental demand in particular, which has had a knock-on effect for values.

“More robust capital growth could be expected across the inner city Melbourne market once overseas migration picks up, but that could be a long way away.”

Dr Nicola Powell

Nicola Powell
Senior Research Analyst

“Many of these inner suburbs, like Southbank, already had a higher level of development that was weighing on rental prices, so when you then have the additional factors brought about by the pandemic then that only exacerbates those downward pressures on rents.

“Until the international borders reopen and foreign students return we are likely to see a weaker rental market in those areas but I think it will get to a point where those rents will start to stabilise.”

Shane Oliver AMP

Shane Oliver
Chief Economist
Shane Oliver

“Despite a drop in new supply as the building boom ends, inner-city areas are dependent on the return of international students and immigrants.

“If that doesn’t happen too soon, we may see continuing high vacancy rates in inner Melbourne and continuing weakness in rents, which would eventually weigh more substantially on inner-city, multi-dwelling property values.

“That’s the risk an investor needs to allow for.”

Tim Gurner

Tim Gurner

“Southbank is going through a renaissance of sorts with an increasing number of restaurants, bars and entertainment precincts while offering proximity to the best parts of Melbourne’s CBD.

“I believe this next property cycle will move quickly and it will be critical to swiftly capitalise on the economic recovery period we are currently experiencing, underpinned by what I am forecasting will be significant movement and migration from overseas from 2022 onwards.”

Andrew Salvo

Andrew Salvo
Ray White Southbank

“As of January 2020, we had 1400 properties under management and our vacancy rate sat at 0.67 per cent. At that point we had 30 properties on the market for let, that flared out to 176 properties overnight.

“Its highest point was 6.79 per cent during the peak of pandemic in August last year. We are now sitting on 62 properties up for let and 3.53 per cent rental vacancy.”

“Since I have been involved with rentals, it has been a very easy conversation with landlords when you are telling them rental prices are increasing.

So, to tell them that we need to drop rents by a certain percentage and educate them to go with the tide has been an immense challenge.”

Nicholas Mitchell from Space Estate Agents Melbourne

Nicholas Mitchell
Property Manager
Space Estate Agents Melbourne

“A lot of the apartments we manage are studio apartments that are located close to the CBD and the universities.

“Before Covid, we would lease them overnight. They’d always go very quickly. I’d say now, the ones we do lease are going for 30 to 35 per cent less.

“The apartments that we do manage to lease aren’t typically going to students.

“They’re people who work in the city or people who live elsewhere who just want somewhere to stay when they’re in the city.”

Southbank residential rental vacancy rate

SuburbJuly 2021 vacancy rateMonthly % change

^Source: SQM Research

CBDs have been emptying in Australia since the pandemic, as workers are no longer required to go into a physical office, while vacancy rates in Sydney and Melbourne have soared due to a lack of international students.

The cost of renting an apartment in inner Melbourne has plummeted by as much as 24.5 per cent during the past year to historic lows and tenants are reaping the rewards, upgrading to better units and saving hundreds of dollars at the same time.

Property managers in the inner city say owners are now having to slash rents to keep them occupied while the international student population remains low.

In the Docklands, the CBD and Carlton, which rely heavily on international students, rental prices for apartments dropped by 24.5 per cent, 24 per cent and 22.7 per cent respectively, in the year to June.

In Southbank, the cost of renting an apartment has dropped by 21.6 per cent, $88 per week, during the past year.

The massive price falls have been a boon for renters, who currently meaning they are now able to upgrade rental apartment in the area after saving almost save $150 a week in rent over the year alone.

However, as the nature of work changes and CBDs become more multi-use, and international student inevitably return after the pandemic, it is likely that inner city rental markets will recover from their current slump and become highly profitable again.

Rental stock on market—apartments

SuburbAugust 2021 vacanciesVacancy net change

^Source: SQM Research

Rental stock on market—houses

SuburbAugust 2021 vacancies Vacancy net change

^Source: SQM Research

Rent prices

TypeRentMonthly % change Annual % change

^Source: SQM Research


The City of Melbourne has invested $42 million to transform Southbank to amplify its reputation as a premier arts and cultural destination.

Plans include 2.5ha of public space and neighbourhood parkland, a new promenade and a City Road master plan, as well as improvements to access and activation.

Melbourne’s apartment supply data is showing continued signs of slowing.

A number of approved projects are experiencing delays brought on by weakened pre-sale demand, rising land and building costs and stricter funding conditions.

At the end of the 2020 second quarter, 15,900 apartments were under construction and due to be completed up to 2024, mostly in the city precinct. That is 12.6 per cent less year-on-year to previous years.

132 Kavanagh Street

132 Kavanagh Street Southbank

A new community centre will be created in Southbank featuring affordable housing and community facilities, following an agreement between the City of Melbourne and PDG Corporation.

The land sale and development agreement will see a parcel of land at the site at 132 Kavanagh Street transformed to accommodate a mixed-use 41-level, 139m development including residential and affordable housing, retail and community facilities.

The proposed development will also include 920 sq m of community facilities across two levels, which will be owned and managed by the City of Melbourne.

Developer: PDG Corporation
Plans: Will comprise residential and affordable housing, a boutique hotel, and retail and community facilities
Value: N/A
Status: Under construction

334 City Road, Southbank

334 City Road, Southbank Gurner

Gurner plans to build a $250-million, 40-storey apartment tower at Southbank, adding to its $7-billion pipeline and signalling confidence in a resurgent Melbourne apartment market.

An application has been lodged for 400 apartments on the 1652sq m site at 334 City Road in a joint venture with the Catalfamo family.

Developer: Gurner
Plans: 40-storey residential tower comprising 400 apartments
Value: $250 million
Status: Planning

296-300 City Road, Southbank

IMG Australia’s $120m Melbourne Hotel Plans Approved

An Edwardian poultry feed warehouse will be transformed into a 27-storey Pullman hotel after the City of Melbourne approved plans for the site.

The Elenberg Fraser-designed tower at 296-300 City Road, Southbank will reach almost 100m high with 344 hotel rooms and 27 car spaces, and a luxury renovation and build over the 105-year-old heritage White & Hancock industrial building.

Developer: Pullman
Plans: 27-storey hotel tower comprising 344 guest rooms
Value: $120 million
Status: Approved

84-90 Queensbridge Street

Queensbridge Street tower.

Developer Time & Place has paid $29 million for a site in inner Melbourne's Southbank on which it will build a 450-unit tower and manage short-stay lets for investors who buy to target that market.

The developer itself will retain 128 one-bedroom apartments in the podium of the 62-level building and about half of the owners of the remaining units - a mixture of two-bedroom and smaller three-bedroom apartments - would probably also rent their apartments through the same third-party manager,

Developer: Time & Place
Plans: 62-level building comprising 128 apartments
Value: N/A
Status: Planning

83-89 Coventry Street

83-89 Coventry Street Southbank

A new apartment tower, lodged by developers under the Victton Pty Ltd entity directed by Yijie Li, Jie Huang and Jeffrey Zhao Yu Li and designed by Bruce Henderson Architects, is currently before of the council.

The $43-million development will 73m high with 174 apartments and ground floor retail across the 24-storey tower at the 83-89 Coventry Street site.

Developer: Victton Pty Ltd
Plans: 24-storey residential tower comprising 174 apartments
Value: $43 million
Status: Approved

10-16 Dorcas Street

10-16 Dorcas Street Southbank

Melbourne-based developer BEKL has been given the green light by the council to build a triple-segment tower in Southbank.

The tower on 10-16 Dorcas Street will have 2293sq m of office space, 172 hotel rooms and 36 dwellings as well as conference and recreation facilities.

Developer: BEKL
Plans: 19-storey mixed-use tower comprising 3000sq m of office space, 172 hotel rooms and 36 dwellings
Value: $150 million
Status: Approved

60 Southbank Boulevard

60 Southbank Boulevard beulah

Construction of Melbourne's tallest towers is forecast to start early next year and will take approximately five years to complete.

Cox Architecture in Melbourne and UNStudio in Amsterdam are now in the process of preparing a submission to council to extend the lifestyle retail podium among other changes.

The hotel’s rooms will sit within nine upper levels and be supported by a Sky Lobby on Level 57 with express links to the building’s auditorium, wellness hub and function rooms.

Developer: Beulah
Plans: Duel 52 and 102 storey towers comprising four distinct collections of private residences, 35,000sq m of office space, a 220-key five-star hotel, a 6,600sq m conference centre
Value: $2 billion
Status: Under construction

175-187 Sturt Street

175-187 Sturt Street Crown

Sydney-based developer Crown Group has expanded its operational footprint with first Melbourne development, in a joint venture project with G3 Projects.

The “arts-inspired” $140 million apartment development comprises two Koichi Takada-designed residential towers that will stand 14-and-16-storeys.

The group selected the Southbank site because of its location in the arts precinct, having close proximity to St Kilda Road.

Developer: Crown Group
Plans: The two towers will comprise 152 studios, one, two and three-bedroom apartments
Value: $140 million
Status: Under construction

Melbourne housing market forecasts

Westpac is expecting Melbourne dwelling values to rise 10 per cent in 2021 and 2022, with the market moving into a sustained boom.

CBA forecasts property prices would rise by 8 per cent in 2021 and 6 per cent in 2022, with house prices to rise 16 per cent in that time and unit prices by 9 per cent.

NAB is currently forecasting house price growth of around 10 per cent for Australia’s capitals in 2021, with apartment price growth likely to be a bit more subdued, particularly in Melbourne.

ANZ recently said it expects Melbourne’s house prices to lift by of 16 per cent over the course of the year.

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Article originally posted at: https://www.theurbandeveloper.com/articles/southbank-melbourne-suburb-property-insights