New VIC Apartment Statistics: Flood fears pass as Melbourne apartment pipeline dries up
Announcement posted by Urbis 14 Dec 2017
Urbis’ Apartment Essentials report for the September quarter 2017 reveals that while most of the current inventory is progressing well to construction, the pace and volume of new supply is slowing down.
As prices hold and even increase, policy makers are left to ponder what will happen if future supply volume continues to fall back.
Urbis’ assessment of Melbourne’s off the plan apartment market is based on sales from 49 off the plan projects in the September 2017 quarter comprising a total dwelling stock of 10,350 apartments, as well as monitoring the status of almost 400 projects. Of the 291 sales recorded, 45% were in the Inner Melbourne area, while 55% were recorded in Melbourne’s middle ring.
As predicted, there was a drop in sales activity in this quarter for two key reasons:
While less than 50% of active projects had commenced construction at the close of the quarter, those that are well progressed through presales will soon move to boost construction volumes in the short to medium term. However, this looks to be offset by a diminishing supply pipeline from both a project launch and a development approval perspective.
In Inner Melbourne, Urbis assessed 131 sales from 32 projects in the quarter. After a surge in one-bedroom apartments in the June quarter, the market preference for two-bedroom two-bathroom apartments returned, boosting the weighted average sale price by $82,000 to $737,000 in this quarter.
Some product differences were apparent across different precincts, with one-bedroom apartments the most popular product in the Central and Inner West Precincts, two-bedroom one-bathroom apartments in the Inner North Precinct and two-bedroom two-bathroom apartments in the Inner East and Inner South.
In Inner Melbourne at a product level, prices remained similar to the previous quarter, however several expensive premium product sales helped to lift the overall weighted average sale price.
Three of the six Inner Melbourne precincts, the Central, Inner North and Inner West, registered a weighted average sale price increase in the quarter. Combined, these three precincts made up 73% of total Inner Melbourne sales – which further helped boost the overall weighted average sale price.
In Melbourne’s middle-ring, the weighted average sale price remained consistent with the previous quarter at $582,000. Two-bedroom, two-bathroom product was also the most popular choice in the middle-ring, accounting for 51% of total sales.
Urbis Melbourne Apartment Essentials Q3 2017 Snapshot
The Melbourne Apartment Essentials Report found:
For media enquiries contact:
Rebecca Parry, DEC PR
Ph: 02 8014 5033 E: urbis@decpr.com.au
About Urbis
Urbis is a market-leading firm with the goal of shaping the cities and communities of Australia for a better future. Drawing together a network of the brightest minds, Urbis consists of practice experts, working collaboratively to deliver fresh thinking and independent advice and guidance – all backed up by real, evidence-based solutions. Working across the areas of planning, design, policy, heritage, valuations, transactions, economics and research, the expert team at Urbis connect their clients in the public and private sectors to a better outcome, every time.
As prices hold and even increase, policy makers are left to ponder what will happen if future supply volume continues to fall back.
Urbis’ assessment of Melbourne’s off the plan apartment market is based on sales from 49 off the plan projects in the September 2017 quarter comprising a total dwelling stock of 10,350 apartments, as well as monitoring the status of almost 400 projects. Of the 291 sales recorded, 45% were in the Inner Melbourne area, while 55% were recorded in Melbourne’s middle ring.
As predicted, there was a drop in sales activity in this quarter for two key reasons:
- Firstly, a greater share of projects have now sold the majority of their stock - Of the 49 surveyed projects across Inner and Middle Melbourne, 71% of projects have sold more than 70% of their available product. Of these, four projects yielding 291 apartments sold out their last remaining stock in the September 2017 quarter.
- Secondly, as we predicted earlier in the year, some activity was brought forward to the June quarter to beat the stamp duty changes coming into effect on July 1, with the anticipated softening of investor activity in the September quarter.
While less than 50% of active projects had commenced construction at the close of the quarter, those that are well progressed through presales will soon move to boost construction volumes in the short to medium term. However, this looks to be offset by a diminishing supply pipeline from both a project launch and a development approval perspective.
In Inner Melbourne, Urbis assessed 131 sales from 32 projects in the quarter. After a surge in one-bedroom apartments in the June quarter, the market preference for two-bedroom two-bathroom apartments returned, boosting the weighted average sale price by $82,000 to $737,000 in this quarter.
Some product differences were apparent across different precincts, with one-bedroom apartments the most popular product in the Central and Inner West Precincts, two-bedroom one-bathroom apartments in the Inner North Precinct and two-bedroom two-bathroom apartments in the Inner East and Inner South.
In Inner Melbourne at a product level, prices remained similar to the previous quarter, however several expensive premium product sales helped to lift the overall weighted average sale price.
Three of the six Inner Melbourne precincts, the Central, Inner North and Inner West, registered a weighted average sale price increase in the quarter. Combined, these three precincts made up 73% of total Inner Melbourne sales – which further helped boost the overall weighted average sale price.
In Melbourne’s middle-ring, the weighted average sale price remained consistent with the previous quarter at $582,000. Two-bedroom, two-bathroom product was also the most popular choice in the middle-ring, accounting for 51% of total sales.
Urbis Melbourne Apartment Essentials Q3 2017 Snapshot
The Melbourne Apartment Essentials Report found:
- Urbis assessed 49 off the plan projects comprising a total dwelling stock of 10,350 apartments
- By the end of the quarter 71% of projects had sold more than 70% of stock
- Urbis recorded 291 off the plan sales in the September 2017 quarter. Of these, 45% were in the Inner Melbourne area, while 55% were recorded in Melbourne’s middle ring.
- Once again, the majority of sales were in the middle ring. Within Inner Melbourne, 33% of sales were recorded in the Central Precinct, followed by the Inner North (28% sales), Inner East (24% of sales), Inner West (11% sales) and Inner South (4% sales).
- The weighted average sales price for the September 2017 quarter was $737,000 for the Inner Melbourne precincts, a $82,000 increase compared to the June 2017 quarter. This increase was driven by more two-bedroom apartments transacting and premium product sales helping to lift the overall weighted average sale price.
- Two-bedroom, two-bathroom product accounted for 40% of total sales across Inner and Middle Melbourne, and 27% of total sales in Inner Melbourne. One-bedroom apartments across Inner and Middle Melbourne accounted for 37% of total sales, and were split evenly between those with and those without a car park.
- In Melbourne’s middle-ring, the weighted average sale price remained steady, decreasing by $1,390 to sit at $582,391.
- Five new projects amounting to 1,119 apartments launched in Inner Melbourne this quarter, compared to nine new projects amounting to 1,700 units in the previous quarter. Only one new development yielding 261 apartments is expected to launch in the last quarter of 2017, with a steadier flow of project releases anticipated in 2018.
For media enquiries contact:
Rebecca Parry, DEC PR
Ph: 02 8014 5033 E: urbis@decpr.com.au
About Urbis
Urbis is a market-leading firm with the goal of shaping the cities and communities of Australia for a better future. Drawing together a network of the brightest minds, Urbis consists of practice experts, working collaboratively to deliver fresh thinking and independent advice and guidance – all backed up by real, evidence-based solutions. Working across the areas of planning, design, policy, heritage, valuations, transactions, economics and research, the expert team at Urbis connect their clients in the public and private sectors to a better outcome, every time.