Stonnington prices eased in 2011 but are likely to pick up in 2012: Jellis Craig

Buyer demand and confidence eased in the pricey inner-Melbourne municipality of Stonnington during 2011, according to Jellis Craig's Annual Property Review, but the agency expects buyers to return to the market for blue-chip properties in 2012.

“In general, against some easing of demand and buyer confidence driven by European concerns, Stonnington held well in 2011. As the municipality takes in some of Melbourne’s highly sought, blue-chip suburbs, it is important to reflect on how specific areas have performed over the last three years, to put any projections for 2012 into context,” say report authors Damien Davis and Steven Abbott.

“Having peaked in September 2009, prices in Armadale and Toorak gradually declined over 2010/2011 back to those of early 2009 levels. However, the Armadale and Toorak price medians can be skewed by several significant sales in any one quarter, which needs to be taken into consideration in suburbs with a low turnover of property.

“Despite quarterly fluctuations in the market overall, the key drivers to the desirability of these suburbs are not investor led. Access to quality schools, parkland, the availability of public transport along with easy freeway access and the superb shopping restaurant and cafe facilities on offer, ensure that property across Stonnington is tightly held,” they say.

Source: Jellis Craig's Annual Property Review

“One of our most significant sales last year was a very large parcel of land at 343-345 Glenferrie Road, Malvern, near Stonnington Town Hall. This 2,063-square-metre allotment of prime residential property was offered with current plans and permits for quality apartments with basement parking and attracted keen developer interest. It was eventually secured by an international consortium baring testimony to confidence in longer-term development opportunities.

“Into 2012, the market in Stonnington has met with renewed enthusiasm. The amount of property enquiry is up significantly on that of late 2011, and we have already transacted a number of January and February sales, normally a quiet month in the sales calendar,” the report notes.

“Buyer sentiment is certainly significantly more positive, and we would expect this increased confidence to translate into competitive purchasing. While potentially decreasing interest rates are certainly a contributing factor to increased demand, we do not expect this to appreciably increase prices over the next 12 months but more contribute to a stabilised market best described as conservatively optimistic.”