As developers continue to invest substantially in the city’s expanding property market, the City of Melbourne is on track to record more than $2.5 billion in new development applications in 2022.
According to eForecasts, the City of Melbourne will evaluate more than $1 billion in new buildings in 2022. This is in addition to the more than $1.5 billion in state-funded development projects proposed for the municipality this year.
The last time the City of Melbourne assessed more than $1 billion in new development applications was prior to the pandemic in 2019.
So far in 2022, the City of Melbourne has received over 600 planning applications worth an estimated $800 million, with 85 percent of applications for brand new developments. The remaining 15 per cent is for changes to existing permits.
With 200 fresh development applications, Melbourne’s CBD remains the hottest property market, with the majority involving new enterprises and store fit-outs.
Carlton comes in second with almost 70 developments, the majority of which are residential properties or extensions to heritage residences. Kensington development proposals have also surged in the new Arden and Macaulay precincts.
Since the gazettal of the City of Melbourne’s West Melbourne Structure Plan, new development interest in West Melbourne has grown, including the $230 million development of the West Melbourne Waterfront Precinct.
A $750 million development over the Goods Shed in Docklands and a $264 million development at RMIT Village in North Melbourne are among the major state-assessed developments for 2022.
“It’s particularly exciting to see developments popping up in the city’s newest suburbs of Arden and Macaulay,” Deputy Lord Mayor Nicholas Reece said.
“The vision to transform West Melbourne into the next Fitzroy or Collingwood is also gathering momentum with some distinctive planning applications approved.”
For the first time, the most recent data has also shown which City of Melbourne suburbs have filed the most appeals against new developments.
East Melbourne has received the most attention within the municipality, with more than twice the amount of VCAT appeals as any other city neighbourhood.
West Melbourne and Docklands have the fewest appeals, while the CBD has the most.
Visitation and office occupancy on the up
New Pathzz data highlights that weekday visitation to the Docklands has spiked by 49.9 per cent between August and September after the work from home recommendations were lifted.
Other significant increases were recorded in Melbourne’s Eastern Core (+39.1 per cent) and Western Core (+36.1 per cent) – representing the city’s main office precincts.
Pathzz, a proprietary technology platform linked to CBRE, applies artificial intelligence and big data processing to a stream of mobility signals and other data sets to provide analytical insights into consumer behaviours.
“Over the close to three years since the start of the pandemic, large tenant demand has been subdued due to uncertainty around how workers would return to the office,” CBRE Victorian Head of Office Leasing Ashley Buller said.
“However, a shift is occurring, with this latest data showing that workers are returning to the office in greater numbers. This is flowing through to increased tenant demand, and we currently have four 10,000sqm+ tenants assessing the market, with indications that more large tenant briefs are in the wings.”
Office Occupancy in Melbourne was sitting at 45 per cent in October, according to Property Council of Australia data, a four per cent increase from the previous month.
Civic, Melbourne’s primary retail precinct, showed a lesser increase in traffic than the city’s major office precincts, while the North Eastern core had the highest share of night time visitors due to the high proportion of restaurants and theatres.
Over the weekend, the Eastern and Western centres had the least traffic.
CBRE Research Director Kate Bailey said these precincts had relatively fewer permanent residents and retail offerings when compared to other parts of the CBD, with the data highlighting the importance of bringing workers back to the office to support these precincts.