Melbourne apartments at price peak: December 2016 HTW Property Clock

Melbourne apartments at price peak: December 2016 HTW Property Clock
Melbourne apartments at price peak: December 2016 HTW Property Clock

Melbourne apartments remain at the peak of the market for Herron Todd White's December Property Clock for units. 

Apartments were at peak in November.

According to HTW the Melbourne apartment market continues to be viewed with caution, with the median unit price falling from $460,000 in December last year to $435,000 by the end of October 2016 (Source: REA Group Ltd, 2016).

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Melbourne apartments at price peak: December 2016 HTW Property Clock

"One main contributor to the falling demand for apartments is the decreasing rate of lending to foreign investors, as the major banks have tightened lending to international purchasers," HTW said.

"Another factor is the continuing increase in supply of apartment stock in the city, with complexes such as Melbourne one, EQ Tower, 888 Collins Street and Platinum complete or beginning the settlement process at the time of writing. This ts with what we predicted at the start of the year, with concerns about oversupply and building regulations still casting a shadow over the apartment market.

"While the Melbourne CBD and Docklands might appear to grab the apartment oversupply headlines, many suburbs in the inner north west of Melbourne have also seen large volumes of completions during 2016. We referenced concerns of excessive supply in suburbs such as North Melbourne, West Melbourne, Moonee Ponds, Ascot Vale and Essendon in our February 2016 predictions and it would appear that this caution was warranted.

"The September 2016 quarter has seen falls in unit median prices across multiple suburbs. In North Melbourne, the median unit price fell 10.7 percent to $518,000 while in West Melbourne, the median fell by an even greater 17.6 percent to $482,000.

"In Moonee Ponds, the median unit price fell 13.8 percent to $535,500, while in Ascot Vale the median fell further by 26.6 percent to $455,000.

"Of the suburbs we referenced, only Essendon has seen a rise in the median unit price of 18.8 percent to $547,000 over the same period (Source: REIV, November 2016).

"Vacancy rates appear to be impacted by the increased volume of apartments. In North Melbourne, the rental vacancy rate is 5.02 percent and is 5.24 percent in West Melbourne (Source: Real Estate Investor, 2016) compared to an average of 3 percent for inner suburbs up to four kilometres from the CBD (Source: REIV, September 2016).

"These higher vacancy rates – over twice the market equilibrium of 2.5 percent - underpin the relative weakness of the unit market in these suburbs."

 

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Melbourne Apartments

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