Record Vacancies In Luxury Melbourne Apartments Reduce Rates For Businesses

It is no secret that first impressions are everything in business. How you are perceived can often be as important or more important than the content of your work. So for business professionals, meeting clients in luxury Melbourne apartments is an essential expense for business travel. But this expense may soon ease on businesses looking to establish a foothold in the region.

Due to record vacancies in luxury apartments in Melbourne, rent prices are expected to come down in a part of the country where the media once declared a "rent crisis." These vacancies, which have increased from 3.6% of accommodations in Melbourne to 4.4% in the last year, have come on the heels of a housing boom that brought a wave of development from Asian and local developers in the last 2 years. Looking to meet population demands, many developers bought in, bringing more housing than necessary to popular neighborhoods like the Gold Coast, the Docklands and Central Melbourne.

The segment most impacted by the crisis is luxury apartments, which have almost double the vacancy rate of regular apartments, due to reports from the Sydney Morning Herald. These vacancies are expected to drive down rates for businesses looking to rent in groups as well as for business travelers looking for a nice place to entertain clients. Many buildings are expected to open up offerings to short stay apartment rentals, bringing in new revenue streams for building owners.

These circumstances have created the perfect opportunity for business travelers, who have been courted by Australian business owners in recent months. Airlines have announced increased air travel to the region from LA and various parts of Europe, and business groups are petitioning local government in Melbourne to add another airport. With luxury apartments in Melbourne coming down in price as well, business travelers will look to strike while the iron is hot in 2012.

Melbourne Apartment Rates Drop Due To Building Boom

With a new year upon us, Australian mortgage holders can look forward to two interest-rate cuts in a row and the prospect of more on the way. But renters in Sydney will soon start to feel the pinch as apartment shortages cause rates to go up in the New Year, a report out this week found. But while Sydney is experiencing a squeeze, Melbourne is flush with new property, after a building boom left many Melbourne apartments ready for renters and short-stay apartment dwellers.

According to SQM Research, the vacancy rate for the month of November in Sydney was 1.5 per cent, with just 7970 houses or apartments available. Compare that with the Victorian capital, where the rate is 3.4 per cent and there were 12,367 places.

For renters and business travelers looking to find extended stay accommodations in Melbourne, this overabundance of housing will find rates reduced in 2012, as developers look to fill vacant units. Sydney renters, on the other hand, will find increased rent. According to the Sydney Morning Herald, who conducted a survey of real estate agents in December, the median rent for a Sydney apartment in the September quarter was $450 a week. In Melbourne it's $100 less. The median for a four-bedroom house in Sydney is $560. In Melbourne, it's $380.

Melbourne serviced apartments will be available for less, causing many business travelers, students and other short-stay visitors to seek better apartments closer to Melbourne, looking to keep costs down in the New Year. At least for the time being, Melbourne developers are happy to have the guests as thousands of investors—many of them from Asia—have bought in heavy in the Melbourne building boom. If their predictions are correct and housing rates hold steady, these developers can expect big returns for 2012, making the renters not the only ones hoping for a windfall in the New Year.