Growing concern of oversupply in Melbourne's inner unit market: HTW

Growing concern of oversupply in Melbourne's inner unit market: HTW
Growing concern of oversupply in Melbourne's inner unit market: HTW

The supply of apartments in Melbourne's CBD and the inner suburbs is plentiful over the next few years with a mounting concern for potential over supply, according to Herron Todd White.

HTW's Month in Review for September estimates 160,000 established apartments will be in the market by 2018 - a 43% increase compared to 112,000 apartments in 2015 and said the recent resale of new apartments, even being sold in brand new condition, are struggling to achieve their original off the plan purchase price.

"It was recorded that 1,518 new apartments settled in the CBD over the past 12 months to May 2015 (City Scope, 2015)," the report noted.

"Demand will need to remain strong in order to match the large influx of new apartments over the short to medium term. inner city apartments that are established or are not being sold off the plan, can generally be purchased at a lower price than a new apartment. 

"off the plan sales in the CBD are strongly underpinned by foreign purchasers. 95% of 941 apartments within the proposed 92-storey skyscraper known as Aurora located in the heart of the city were sold in a fortnight. Approximately 75% of the buyers are from South-East Asia and China. EQ Tower, another 63-storey skyscraper on A’Beckett Street, was sold out within eight months. The development will comprise 633 apartments on completion in June 2017."

Michael Crawford

Michael Crawford

Michael is the real estate reporter for western Sydney and loves writing about homes and the people who live in them. A former production editor and news journalist, he enjoys writing about real-world property purchases as well as aspirational buys and builds. Following a recent move from Sydney’s northern beaches, Michael now actually enjoys commuting.

Tags: 
Oversupply Apartment Market

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