Beach boxes in Melbourne fetch prices rivaling houses despite basic amenities

Australia's beach boxes—iconic, brightly painted coastal sheds along Port Phillip Bay and Western Port—offer empty-nest basicness: no bedroom, no running water, no power. Yet they command prices that can exceed a typical Melbourne suburban house, driven by scarcity, location, and the long-running appeal of beachfront access on public land. The sheds, known as beach boxes, bathing boxes or boatsheds, have remained along the Victoria coastline since the 19th century, with a market that prizes limited supply over all else.

There are roughly 2,000 beach boxes in the Melbourne area, with about 96 arranged side by side along Dendy Street Beach in the upscale suburb of Brighton. Buyers must own a nearby home, and the structures cannot be rented out or used for any commercial purpose. No overnight camping is allowed, solar cells and motorized electricity generators are banned, and the design and size of a shed cannot be altered to add covered decks. The public nature of the land and the license-based ownership create a peculiar dynamic: a private use of public space with strict limits on how the asset can be used or developed.

Market episodes illustrate the scale of the phenomenon. Portsea, a tourist town about 90 minutes from Melbourne, is home to some of the most expensive boxes, often trading around AU$1 million. A record AU$1.2 million was set last year for a box in the area. Outside Portsea, Mount Martha has seen boxes with decks that would fetch higher sums, though owners cannot add these features to existing structures. Beach Box No. 26 on South Beach sold for AU$1 million, well above the expected price and about AU$350,000 more than vendors anticipated. The auction underscored that some boxes, as real estate agents note, carry value beyond the structure itself because of location, views and the rarity of such public-land holdings. The broader Melbourne market shows the scale of property costs: the mean price of a Melbourne dwelling was AU$803,194 in August, according to property research firm Cotality.

Industry professionals are cautious about framing beach boxes as straightforward investments. Real estate agent Alex Corradi, who has sold several boatsheds, said there are other boxes in Mount Martha that could sell for more if they were modified, but buyers cannot add decks or alter the shed’s core design. “I don’t really see them going backwards. I think they will just continue to go up,” Corradi said, but he added a blunt caveat: “The banks will not lend against it, so these are all cash buyers.”

Investment advisers, while acknowledging scarcity as a driver of long-term capital gains, warn there is little to enjoy in an ongoing cash outlay. Melbourne investment adviser Cate Bakos acknowledged scarcity will likely deliver capital gains in the long term, but she cautioned that there is no ongoing financial return to justify the outlay in the near term: “Buying a beach box is, quite frankly, an illogical purchase.”

On the ground, owners treat the boxes less as rental assets than as family keepsakes and weekend hubs. John Rundell, whose Bathing Box No. 43 sits along Dendy Street Beach, bought it in 1992 for AU$12,000 from the local council. He does not view it as an investment, saying, “What’s the good of calling it an investment if you don’t want to sell it? I suppose the market price is the market price. It does encourage people that are not using them now to sell them. But they don’t turn over very often because they tend to stay within families through generations.” Rundell’s family has used the box for Christmas lunches and New Year’s fireworks-viewing during Southern Hemisphere summers. The box has no electricity and no plumbing; instead, an ice chest keeps drinks cold, and a camping potty provides privacy. He pays an annual license fee and rates on the box and carries public liability insurance with a coverage value of AU$20 million. In practice, the structure is often used by friends who borrow the keys.

History and context help explain why these sheds endure. Victoria—the state named for Queen Victoria—traces their origin to the 1860s, when modesty rules and beach regulations led to structures built to preserve decency while bathers changed clothing along the shore. Local historian Jo Jenkinson wrote in her 2015 book, The Lure of the Beach: A History of Public Sea Bathing in Brighton, that similar shacks appeared elsewhere as private beachfront space on public land. Australia has gradually removed many such structures along its coastline, but Melbourne-area boxes remained in large numbers. Today, around 2,000 beach boxes survive in the Melbourne vicinity, with the most valuable examples clustered in high-end resort towns along Port Phillip Bay.

The economics of beach boxes remain a curious blend of cachet, scarcity, and public-policy constraints. Buyers face limitations—from no tenancy rights to no commercial operations—and lenders’ reluctance to provide mortgages. Yet the enduring appeal of beachfront views, the romance of Victorian-era provenance and the potential for long-run price appreciation keep the market active. For some owners, the box is a family heirloom; for others, a rare, cash-only bet on scarcity. As the market evolves, observers will watch whether price trajectories continue to outpace typical residential values or slow as financing realities and regulatory constraints temper demand.