South Yarra apartment block yields in "race to the bottom"

Constructed in the late 1960s, two Clara Street, South Yarra apartment blocks have been sold at more than $5 million each on yields of 4.3% following an auction conducted by Teska Carson.

They were the 25 Clara Street offering - 12 strata titled apartments with a current income of circa $224,000 - and 27 Clara Street - 12 strata titled apartments with a current income of circa $235,000. 

The Clara Street sales follow other recent sales including 11 Park Street, South Yarra last November at $4.4 million on a 2.73% yield. It was an art deco, three level, six apartment complex. 

In December, 6-8 Mona Place, South Yarra sold at $2,735,000, on a 3.62% yield. It was a four level, six strata titled unit complex sold through Savills Australia.

Tom Maule at Teska Carson said with demand at or near its peak, supply nominal, and liquidity high with interest rates at an all-time low, "yields were in a race to the bottom".

"Enquiry for these types of properties at the moment is extraordinary to say the least and it’s being driven by a booming housing market which is in turn being driven by Melbourne’s exceptional population growth," said Maule.

South Yarra office yields are a different matter.