New apartment sales in Melbourne slowing: Urbis

New apartment sales in Melbourne slowing: Urbis
New apartment sales in Melbourne slowing: Urbis

New apartment sales in Melbourne are slowing, along with supply, according to property consultant Urbis.

The consultancy's fourth quarter 2016 survey suggested 10 surveyed projects had already met pre-sale thresholds.

But others have "likely been affected by moderating short-term demand conditions", according to Urbis whom issued the report as the market responds to the latest curbs on investment.

Mark Dawson, director of property economics and research, said supply volumes were starting to scale back as financial and regulatory measures applied the brakes.

"Future launches will give a more genuine indication of market appetite for central City projects, since there has been some easing of momentum at the tail end of major projects," Dawson told Fairfax Media.

"Sales volumes have held firm in precincts outside the central city, yet continue to remain modest in the context of central city volumes over the last two years.

"Successful suburban projects are delivering similar sales numbers on a quarterly basis compared to central precinct projects, as market appetite continues to spread to the suburbs." 

According to Urbis, prices for new apartments rose in the last quarter last year compared to the previous quarter in the inner-north and inner-west precincts.

But they fell in the central, inner-east and inner-south precincts and overall.

The weighted average sale price in inner Melbourne was $658,000.

"Prices tend to move around on a quarterly basis due to variation in stock, so we have not seen evidence of a pullback in pricing," Mr Dawson said.

Separate figures from consultancy Charter Keck Cramer last month showed the number of apartment commencements in Melbourne dropped from 24,500 in 2015 to 16,300 last year.

The Weekend Australian reported more than half the apartments bought off the plan in Melbourne’s CBD, Docklands and Southbank since 2011 have changed hands at a loss, according to research from BIS Oxford Economics.

The rash of losses sets a lower bar for valuers, meaning banks are willing to lend less on the next sale, according to BIS analyst Angie Zigomanis.

“The risk is that this cascades down, setting lower benchmarks for the next round of apartment projects,” he said.

According to BIS Research, Melbourne city, which includes the CBD, Southbank and Docklands, Whitehorse city (including Box Hill, Burwood and Mitcham) and Port Phillip city (including Port Melbourne, St Kilda and part of Southbank) saw more than half units bought off the plan since 2011 breaking even or reselling at a loss.

Melbourne’s building cycle will peak in 2017 with 18,350 new high-rise units completed compared with 13,453 last year. 

Melbourne Apartment Sales

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