Inner-Melbourne units under $750,000 best prospects for investors: CBRE
“Well-located properties with good access to public transport and amenities continue to be the most resilient in the current conditions. Properties in the sub-$750,000 price bracket continue to perform well with demand levels remaining quite resilient,” says CBRE director of residential valuations Jarrod Frazer.
According to realestate.com.au, there are about 1,600 inner-city apartments for sale under $750,000.
Among the new inner-city developments, Lend Lease is selling one-bedroom apartments for about $465,000 in its Convesso Concavo project in Docklands while two-bedroom apartments in Pan Urban’s Lacrosse project (also in Docklands) are priced around the $530,000 mark.
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Outside of the CBD, the unit market is expected to continue to perform in line with the overall subdued
In its November update, RP Data-Rismark calculated that
In comparison
Even if prices don’t appreciate in 2012, Melbourne investors can still expect some level of return in the form of rising rents due to a low overall vacancy rate of just 2.2% (well below market equilibrium of 3%), with rental yields hovering around 4.5%.
“Residential vacancy rates, although increasing slightly, are still relatively low at 2.2%. This has driven rental growth with yields for investors continuing to see some upward pressure,” says CBRE.
According to RP Data-Rismark,
Reilly says a prolonged period of low vacancy could result in renewed interest from investors as upward pressure is placed on rents.
“The market remains soft across all sectors, with the current low levels of demand ensuring negotiating strength is clearly in favour of buyers. As has been the case recently, strong selling features are crucial to completing sales, with proximity to public transport, schools and employment very important. Properties that lack these key features are seeing selling times extended,” he says.
Investors might need to venture outside of
According to Residex, country
The average rent for units also increased by 15.2% over the year, which drove strong yield growth to 5.3% and a median asking rent $265 per week for rural and regional
Overall though CBRE global research and consulting manager Sam Reilly expects residential market conditions in
“The level of available stock remains low as vendors avoid taking properties to market where possible. While demand has eased the lack of quality stock entering the market is also affecting sales volume,” he says.
According to CBRE, the prestige sector is under most pressure at present, with longer selling periods and adjusted prices now becoming evident in most areas with prestige real estate valued at more than $2 million. In order to make a sale, vendors must meet the market.