Boho blues: How St Kilda living lost its lustre

The Age

27-06-2025

Walk down the street in St Kilda today, and you'll find it difficult to ignore the rows of vacant shops, sleeping bags, glass bottles and remnants of takeaway food. With homelessness in the area on the rise and an oversupply of apartments driving prices down, there are fears this once-cultural mecca is on a downward trajectory.
But despite the suburb's decline, locals love it. It may look gritty, but they believe nowhere else in Melbourne offers such a rich diversity of people.
Shop windows, thick with dust, are plastered with big red 'For rent' banners. Popular Acland Street has become a revolving door of frozen yoghurt cafes and ice-creameries, cheap 'boho' fashion and pop-up stores. Fitzroy Street, once a premier drag for Melbourne's best restaurants and a 24/7 tourist precinct, has become a shadow of its former self – and home values reflect that.
Originally built for wealth, St Kilda today is a patchwork of quiet, tree-lined streets with stately art deco homes, a few remaining grand mansions (most of which have been subdivided into flats) and a plethora of '60s, '70s and '80s-style apartment buildings of varying quality.
In St Kilda West, the suburb closest to the affluent Albert Park, you'll find bigger-than-normal Victorians and Edwardians on larger blocks, with the odd art deco thrown in for balance, as well as the Catani Gardens and the St Kilda Foreshore Reserve, which are home to public events.
But head to the east, and the big blocks of land and leafy streets slowly give way to scrappy apartment blocks, poorly maintained public housing and abandoned homes. The area doesn't look good – and apartment values are suffering as a result.
While unit prices have generally gone up across Melbourne, in this area, long-renowned for its beachfront, artistic lifestyle, apartment prices have gone backwards for the past decade. Buyers' advocates advise clients to stay away.
And yet, locals love the area for its social diversity, bohemian feel and proximity to great restaurants and cafes.
'St Kilda's unit market has been flat for a decade – you can't just lump it in with the rest of Melbourne,' says local buyers' advocate Karen Avallone, who has lived in St Kilda since the late 1960s. 'We tell our clients not to buy apartments in St Kilda unless it's a small, older block. Big, generic buildings? Oversupplied.'
Figures from property data analytics firm Cotality confirm this. Over the past five years, St Kilda unit values have dropped 5.9 per cent, St Kilda West is down 4 per cent and St Kilda East has fallen 4.7 per cent. By contrast, values across Greater Melbourne rose 2.4 per cent.
In the December quarter, 24.9 per cent of homes sold in the Port Phillip local government area went for less than their vendors had paid for them.
Tim Lawless, Cotality's research director, says these 'relatively soft conditions' are the result of people wanting houses with more space during and after the pandemic.
'During this time, house values outperformed unit values across the country as buyers gained a preference for larger homes,' he says. 'This was especially the case in Melbourne, where social distancing provisions and lockdowns were more severe.'
Another contributing factor to the fall in value is that listings have generally been tracking well above average levels since 2020, as well as an oversupply of units in the area.
'Apart from a brief period in 2023, unit listings in St Kilda have been elevated relative to the 10-year average,' Lawless says.
'Higher stock levels have likely weighed on values, with buyers benefiting from more choice and less urgency, supporting a stronger position of leverage when it comes to negotiating on price. For sellers, this means the competition from other vendors has been significant, forcing vendors to adjust their pricing expectations lower.'
Jim Malamatinas, director at A Game Property Advisory, has seen the same thing. 'About 79 per cent of the dwellings here are apartments. There's just not enough scarcity to drive price growth,' he says. 'We advise clients to steer clear of large blocks, and to look to St Kilda West if you want capital growth.'
He says suburbs that tend to do best have a ratio of 70 per cent owner-occupiers to 30 per cent renters. In St Kilda, 63 per cent of homes are rentals, compared with 37 per cent owner-occupiers.
'There are a lot more people renting in St Kilda because there are a lot of apartments, and a lot of these go to singles or couples because they are smaller, usually one or two bedrooms,' Malamatinas says.
But for many locals, living and buying in St Kilda is about more than just making money off your property – it's about the experience. James Norman, a 54-year-old writer, bought his art-deco flat on Barkly Street 15 years ago for $480,000. While the apartment has gone up in value since (there's one currently for sale in his building for $580,000, which he says recently passed in at auction), he's not bothered by the comparatively low increase.
'I moved here to live – I didn't buy my place as part of an investment portfolio,' he says. 'Living in St Kilda has an element of feeling real and of being genuinely diverse, with all sorts of different socioeconomic groups living here.'
Fashion designer Neisha of Neisha Clothing has, along with other artists, been offered cheap rent on Fitzroy Street as part of the area's efforts to rejuvenate the area. While she reckons the vibe is 'sadder' than before COVID, she still loves the area and its diversity.
'It's one of the last areas [in Melbourne] where you see a hodgepodge of everybody, and you're just forced to mix,' she says. 'I can be in a cafe and overhear a guy talking about buying his third yacht, and then I walk out and there's a guy on the street asking me for money and making a bong in the morning.
'This shit … is so real. I like to see the reality of existence in this world that we live in so visible to all of us.'
But not everyone is as accepting. The City of Port Phillip recently proposed fining homeless people amid residents' frustrations with rising crime and drug use in the municipality. The proposal was ultimately scrapped after some locals raised concerns it might not meet human rights legislation. The rate of homelessness, however, remains an issue in St Kilda, with many attributing the empty storefronts to its rise since COVID lockdowns.
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Unused doorways provide shelter to many of the area's homeless who, following the provision of emergency hotel accommodation by the Victorian government during lockdowns, have been left once again to fend for themselves.
'Since the government program that put people in hotels ... has been withdrawn, the mix of people you encounter is different,' Avallone says. 'It's really sad because those people need help … but whatever it is that's bringing, particularly the drug trade to St Kilda, isn't being addressed.'
Local buyer and vendor advocate Aife Raveche, managing director of Raveche Property, who has lived in the area for a decade, says she's noticed a definite shift since COVID when it comes to safety in St Kilda.
'It's always been gritty, but in the past year it feels more ... abandoned,' she says, citing an example of a rough sleeper moving onto her office's front porch over the summer break, when many local businesses were closed.
Avallone says 'there are a lot of empty shops and houses [in St Kilda] because owners don't want to collect rent below market rate. Some property owners just keep them empty – negatively gearing them is easier than dealing with compliance.'
Malamatinas agrees there has been an increase in vacant shopfronts in St Kilda, a trend he reckons has been worsened by COVID, online shopping and a shift to working from home.
But the biggest problem, he thinks, is that many of the commercial spaces in St Kilda are owned by older investors who don't need the money from a sale, reducing foot traffic and contributing to an abandoned feel in parts of St Kilda.
'They bought them 30 years ago or through their super funds, and now everything is paid off and there is no urgency for cash, so they prefer to leave them vacant [rather] than lower the rent,' he says. 'A lot of our clients buy office warehouses because they yield well, and they grow over a long-term.'
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To try to force landlords to sell these empty buildings, the Greens last year proposed a new vacant-property tax that aims to encourage landlords to lease out empty spaces, but its impact remains uncertain.
The City of Port Phillip acknowledges the challenges but says things are improving. According to recent council data, vacancy rates have fallen: Fitzroy Street dropped from 13 empty shops (12 per cent) to seven (6.5 per cent) between June 2024 and December 2024; and Acland Street from 10 empty stores (10.4 per cent) to six (6.3 per cent) in the same period.
Port Phillip mayor Louise Crawford said new businesses continued to open all the time, from those supporting mental health with wellness activities, such as yoga and boxing, to 'relaxed evening offerings that include food trucks, craft beers and soulful music'.
Norman, who spent 20 years in Melbourne's north before moving to St Kilda, is happy to stay where he is. He has paid off his home and is now enjoying the inner-city lifestyle.