South Yarra joins inner city Melbourne apartment market softening: HTW

South Yarra joins inner city Melbourne apartment market softening: HTW
South Yarra joins inner city Melbourne apartment market softening: HTW

The apartment market for Inner City Melbourne has started to soften in the first quarter of 2017, according to Herron Todd White’s latest report.

The property valuation firm says that most inner city suburb median unit prices have dropped in the last quarter.

“According to REIV reports, most inner city suburbs have seen drops in median unit prices since last quarter, with Docklands median unit prices falling by 2.3%, Southbank experiencing a 1.8% drop and South Yarra seeing a 0.7% decline.

“There is growing concern regarding the oversupply of inner city apartments which has been well documented by the media in addition to being recognised by the Reserve Bank of Australia who have issued warnings that current high levels of supply may constrain growth in prices and rents in some market segments.

“It is anticipated that the recent implementation of tighter lending policies on both foreign purchasers and investors will cause the apartment market to further soften in addition to increasing settlement risk for developers,” the report stated.

Herron Todd White says that the prestige market in Melbourne is still going strong.

“The current state of the prestige market is still strong.

“The demand for property is outweighing the supply of properties for sale.

“The most in-demand properties are those with large land holdings or properties that can be redeveloped or knocked down without any planning restrictions.

“Other key factors are the continuing low interest rate environment, proximity to the CBD and population growth,” the report advised.

Kew, Balwyn North and Malvern are among the Top suburbs for prestige properties according to Herron Todd White.

“The strong prestige market is highlighted in suburbs such as Kew, Balwyn North and Malvern.

“As of March 2017, the median house prices for these suburbs were $2.165 million, $1.925 million and $3.01 million respectively, with a quarterly change of 11%, 11.2% and 24.6%.

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South Yarra joins inner city Melbourne apartment market softening: HTW

“Highlighting the current state of the market, on the 25 February 2017, 17 Spring Road, Malvern (above) sold for $5.075 million.

“The auction lasted 60 seconds with a total of 17 bids. The reserve was $4.3 million.

“The key factors that could result in the prestige market slowing down are an increase in interest rates, a bearish equities market and overall loss of confidence in the market,” the report stated.

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Melbourne Htw

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