Nerida Conisbee, REA Group’s chief economist, has believes that Melbourne’s high-rise hangover could last years.
Conisbee told Sky News that Melbourne’s CBD will likely “continue to dominate in terms of very high-levels of vacant apartments” due in part to regular shutdowns and an unwillingness and/or inability of workers to return the the CBD.
Consibee also noted that the collapse in immigration, and international student numbers in particular, will weigh on Melbourne’s inner-city apartment market.
International students dominate the high-rise market in and around Melbourne’s CBD and their absence is a key reason why rental listings have more than doubled since the COVID-19 pandemic began:
It is also why Inner Melbourne rents have tanked, down 11.2% according to CoreLogic:
Realistically, the oversupply of inner-city apartments won’t abate until Australia’s international border is reopened and immigration (international student) flows resume.
Immigration is the key driver of household formation and rental demand in Melbourne (as well as Sydney), especially with regards to high-rise apartments.