Sponsored by :

Find Investment Property

Category : Melbourne Property News

« Older Entries

13 reasons why Melbourne still on top

Posted by Mark Mendel in Melbourne Property News on 01 29th, 2012

Towards the end of last year, Scott Keck from Charter Keck Cramer outlined his reasons why he thought Melbourne was still one of the greatest locations to invest in property. He outlined 13 points as below:

1. Melbourne is assured of sustained long-term population growth which creates strong demand for real estate in all classes.

2. Over the past four years as a result of the GFC, the Australian markets, which usually depend on “speculative” accommodation, built without commitment, have been inactive. Consequently the vacancy rates in all property classes – not just residential but also retail, commercial and industrial – are very low, as a result of which rental values are likely to increase dramatically over the next six to seven years, enhancing yield returns and capital growth.

3. Melbourne is the fastest-growing city in Australia.

4. Australia has an outstanding geo-political location, in close proximity to the expanding economies of India and China.

5. The Australian population and economy are relatively small, nimble and quick to respond in a proactive fashion to global challenges.

6. Australia’s sovereign risk is extremely low to the point of being non-existent.

7. Australian politics is not polarised, but rather broadly balanced, and between both political parties, responsive to the private sector.

8. Australia has a high and enviable level of corporate governance, particularly within its banking industry. The four major banks in Australia are well governed, have strong balance sheets, and remain supportive of the property sector.

9. In Melbourne and Sydney, Australia’s two leading capitals, the private sector is responsible for 93% of all building construction and development. Accordingly, as population growth creates demand, the opportunities for the private sector are excellent.

10. The Australian property markets are well educated, mature and in general terms, managed by world-class executives operating at levels of best practice.

11. Australia’s long-term economic stability is well underwritten by its natural resources and export markets to the growing economies of India and China.

12. The Australian economy is generally well managed.

13. Over recent years there has been a dramatic increase in interest by Asian and European investors in Australian property, and this is likely to continue. Asian investors are keen to shift money out of their own countries, and European investors grow more fearful of an EU economic slowdown.

readmore

Melbourne predictions – Who knows!

Posted by Mark Mendel in Melbourne Property News on 12 5th, 2011

The Real estate Institute of Victoria (REIV) believes that Melbourne’s residential property prices could double over the next 10 years according to REIV CEO Enzo Raimondo.

The prediction appears to be based on analysing the previous 10-year performance. Mr Rainmondo reported to have said that the trend over the last 10 years or more has been upwards and, when comparing the median price today, with what it was in 2000, he believes that prices “will probably double again” in 10 years to over $1 million.

The prediction may have validity, given the volatility of the share market and given that the real estate sector has been holding up well. This could be offering an entry point for first-home buyers and others to look at buying a property to relocate to, or as an investment.

Meanwhile there is a growing consensus that the residential property sector may be coming off from the bottom of a cycle which when considered in the light of events in Europe and the US which have also affected confidence in the Australian market. The view is that the economy is quite sound, our banking system good, and confidence will improve over time.

A series of rate cuts would enhance affordability, a possibility given events in Europe and the US.

Meanwhile banks which have seen declining mortgage applications are aggressively competing for market share with each other, offering deals on a variety of home and investment property loans including heavily discounted fixed term loans.

readmore

Melbourne Spring Property Report

Posted by Mark Mendel in Melbourne Property News on 10 31st, 2011

It’s the perennial questions in Melbourne’s bay side suburbs: are property prices headed for a downward spiral in Australia’s second biggest city? As if to contrast my meagre attempts at certainty, one economist who does make predictions which often, in hindsight prove correct, is Iranian born Nouriel Roubini. In Perth last week, the professor was not willing to join the chorus calling our market over-heated – or indeed say that it is about to fall off a cliff. He says there will be correction, which is underway, and, for the other capital cities, that there will be significant regional variations in price patterns depending on responses to the resources boom.

House prices dropped in all cities for the three months to the end of September, expect for Hobart, where they were flat. In Melbourne house prices fell 0.9 percent which was an improvement on the previous quarter. Unit prices however could only be described as “steady” in Melbourne. Note that the total number of active Melbourne apartment projects has fallen below 300 for the second successive quarter. However, even though apartment construction has fallen away during the September quarter from its 2010 exuberance, Melbourne remains the “Manhattan” of Australian cities, with the Victorian capital accounting for a record 44% of all Australian multi-unit approvals in 2010-11.

Melbourne has the highest vacancy rate and despite a modest fall in property prices this year, gross yields for apartments remain at 4.4 percent. Record levels of new inner city apartments are coming on to the market.

Melbourne’s median house price was $558,000 which as a reference point represented an 8.7 percent growth rate for the 10 year period to end of September. Prices have declined 2.1 percent for the quarter while rents have risen 2.7 percent for the year ending September 2011. Sales of houses were active when compared to the same quarter of 2010, up 7.1 percent. These figures supplied by Residex indicate that a surge in properties for sale is keeping a lid on prices.

Melbourne, having achieved a higher growth rate than Sydney in recent years, has taken a turn in sentiment with discounting now rife and agents reporting a dearth of buyers in the higher value suburbs such as Brighton. Victoria which has had a sustained period of population growth from both interstate and international migration has seen construction home and apartments building outstrip demand, putting a lid on price growth. Migration rates have fallen back to levels not seen for five years. This is attributable to less migration from Sydney where affordability factors were rife and a pause in international migration – a factor which is affecting to a degree all major cities with the possible expectation of Perth.

readmore

One Bedroom Apartments in Melbourne

Posted by Mark Mendel in Melbourne Property News on 09 26th, 2011

One bedroom apartments for sale in Melbourne have become very popular property investments in recent years with growing demand for this style of apartment in Melbourne. While some believe they might be too small to resell in years to come, shrinking household sizes, a fast-growing population and Australia’s housing shortage point to a rolled-gold future for well-located one-bedroom units.

The big trend in housing in the next 20 years will be an increase in demand for smaller dwellings. According to the Australian Bureau of Statistics, the number of one-person households in the country will surge to between 3 million and 3.6 million by 2031, a huge increase on 2006 figures when 1.9 million people lived alone. This change in demographics will see the demand for one bedroom apartments in Melbourne rise significantly.

Expect more ”double income no kids” couples, or DINKS, to be buying and renting properties, too. Greater numbers of parents also will be moving from baby boomer to empty-nester status.

The ABS forecasts that couple-only families will overtake the number of couple families with children in 2013 or 2014. By 2031, DINKS are expected to account for up to 60 per cent of people living in couple relationships.

Today, developers are including more one-bedroom units in their projects due to the rising demand and the need for more affordable living spaces in Melbourne.  Investors need to tread carefully, though, because many new units are smaller than those built five years ago.

The Oliver Hume Real Estate Group assessed 30 new off-the-plan projects, with a total of 3420 units, which were put on the market around Melbourne in the first three months of this year.

It found one-bedroom units had a median size of 48 square metres, 4 per cent smaller than the typical unit in a development launched in the 2010 December quarter. The size of two-bedroom units fell almost 6 per cent to 66 square metres during the same period.

But in a sign of changing attitudes to smaller units, the drop in size for one-bedroom units hasn’t been matched by a decline in the median entry price, which jumped by $17,000 to $387,000.

Many people think that a one-bedroom apartment will be boxy and uninviting but if the layout works, the apartment can have as much appeal as something larger.

There needs to be ample storage and, if possible, a balcony – the outside area will add a good deal of amenity and space and, therefore, value to your investment. One bedroom apartments in Melbourne are perfect for those looking to invest in the inner circle of Melbourne or for those looking to get into the property market at a more affordable price that what the larger 2 bedroom apartments are demanding.

readmore

The Block 2011 – Melbourne Townhouses Richmond

Posted by Mark Mendel in Melbourne Property News on 08 25th, 2011

The 2011 version of The Block, located in Melbourne has been a success for almost all those involved from channel 9, through to the local residents and let’s not forget about the all important contestants.

All I can say is, renovating looks like hard work!

For 8 weeks the contestants spent hundreds and hundreds of hours renovating their homes. Blood, sweat and tears was required to ensure each room was completed by the end of the week and that the homes were up to scratch for auction day which occurred last Saturday evening the 20th August. The final was shown on Sunday night and at the end of the great season, the Reserves were announced and the Auction begun.

First on The Block to go to auction were Josh and Jenna. With a reserve of $950,000, it was always going to be hard for them to win with a reserve set so high. The room was packed, the auctioneer was ranting and raving on the stage yet not a single person made a reasonable bid. A vendor bid was made at $900,000 and the property was shortly passed in after that. You would be happy to know that after a few days of negotiating they finally sold their property for a cool $1,000,000! This allowed them to cash in for $50,000 which I’m sure will go a long way to paying for the wedding and honeymoon (after their public engagement!)

Second on The Block were the mums Katrina and Amie. Their reserve was set at $860,000 and it seemed that every one still wasn’t in the mood to be bidding at auction. Their property was also passed in with the sale achieving later on in the night at the reserve price of $860,000. The mums unfortunately didn’t make a cent out of the 8 week exercise. I know they probably weren’t doing it just for the money but after giving up 8 weeks of their life to participate it would have been nice to walk away with something… unfortunately not!

Polly and Waz sold their home on auction night, the only couple to do so, for $865,000, only $15,000 over the reserve which allowed them to be declared the winners and walk away with the extra $100,000 cash prize! What a bonus! (if the other properties had sold on the night during the auction, they would have only placed third.)

Tania and Rod’s house also was passed in on the night of the action. It didn’t take long through for the agents to collect 5 serious buyers, of which only one attend the Saturday night auction and got them into the backyard for another mini auction. To the agent’s credit it worked! The house sold for $922,000, which was $72,000 above the reserve of $850,000 making it a good payday for Tania and Rod.

Overall I think The Block was a success and has probably once again encouraged many to start their DIY projects… unfortunately, like what happened on the block, many property renovators will lose money or come out break even. To show this in its true light Chanel 9 paid $3.6m for the 4 homes and spent $100,000 on each. Im sure there were freebees and extra labour thrown in for good cause, not to mention the interest bill on the mortgage that most people would have to pay. Even excluding all these extra items, Chanel 9 spent at least $4,000,000 on The Block including renovations only to see a $3,647,000 return. That’s a 10% loss or $333,000 in cold hard cash! Not something we want to give away.

So next time you think about doing a renovation project, just remember it’s not as easy as everyone makes it out to be and the risks are high and there is no guarantee of a rewarding ending with a greater opportunity of you making a loss.

readmore

Melbourne Australia’s Most Liveable City!

Posted by Mark Mendel in Melbourne Property News on 06 24th, 2011

Melbourne has come second in the latest study by the “Global Liveability Survey” compiled by “The Economist” only behind Vancouver in Canada.

The study ranks 30 factors out of 100 points with Melbourne only falling short for its traffic jams.

Many Australian cities received perfect scores for education and healthcare but Melbourne stood out from the rest. It is a great achievement for Melbourne to be number 2 on the list with Sydney not so far behind in 7th position, while Adelaide and Perth where 8th. Brisbane was ranked 21st out of the 140 cities.

The Lord Mayor Robert Doyle stated,

“We all love Melbourne for its parks and gardens and fantastic events and it’s great to have it recognised for the wonderful city it is.”

The index takes into account factors including crime rates, cost of living, infrastructure and climate.

Australian cities far outranked some of the world’s most popular destinations – London managed a paltry 53rd and New York 56th.

Economist Intelligence Unit editor Jon Copestake said only 2.3 per cent separated the entire top 10 cities, while Brisbane was only 3.3 per cent lower than Melbourne.

Sydney scored slightly worse than Melbourne on crime.

While the award for second place is great for one of the world’s most liveable cities, property developers locally and internationally have also recognised the demand for residents with a push to purchase development sites that allow for higher density developments such as new apartments.

According to Savills Australia, Developers are paying record prices for scarce high-density residential development sites because of Victorias strong economy and Melbourne’s renowned as a liveable city.

Demand from international property developers is strong being attracted to Melbourne population growth; reputation for economic stability and comparatively affordable land prices says Savills divisional director Nick Peden.

Mr Peden said he expected land values and demand for high-density development sites to increase further over the rest of the year. ”Melbourne has all the key fundamentals to provide consistent growth over time,” he said.

If this does remain, those buying in new apartments today will certainly see some good capital growth as new apartments in Melbourne become more expensive due to land prices and construction costs.

readmore

Off the plan apartments Melbourne

Posted by Mark Mendel in Melbourne Property News on 05 14th, 2011

Property investors and home buyers in Melbourne always consider buying an off the plan apartment as the stamp duty savings in Victoria can amount to tens of thousands of dollars in savings. The benefits of buying an off the plan Melbourne apartments also include such items as having the opportunity to save for additional deposit during the construction phase, selecting an apartment early on in the sales process, sometimes having the option to select a colour scheme before the developer has started construction and being in a position to lock in a price early and reap the rewards from any capital growth during the construction time period.

There are some areas of Melbourne where off the plan apartments get sold quickly. These areas in Melbourne generally are inner city locations which can include South Yarra, South Bank, Richmond, St Kilda, Prahran, Port Melbourne, Abbotsford and more.

It is important when buying an off the plan apartment in Melbourne and in other locations around Australia that as a home buyer or property investor, you understand the risks involved along with the process of buying an off the plan apartment. Below is a quick overview of the process of buying an off the plan apartment in Melbourne:

1. Submit a Sales Advice and a holding deposit to take your selected apartment off the market

2. Review contracts with your solicitor or Conveyancer

3. Ensure 10% is available for a deposit. This can be Cash, Bank Guarantee or Deposit Bond depending on the Developers Finance arrangements

4. Sign contracts and exchange with deposit

5. Organise finance 3 months prior to completion

6. Conduct a pre-settlement inspection

7. Settle on your new apartment

As you can see from the above, buying an off the plan apartment in Melbourne is fairly simple and can normally be done in 7 to 14 days. Ensuring you have a good team around you including a good mortgage broker for your home loan along with a conveyancer that is familiar with off the plan contracts which are generally larger and more detailed than that of an established property.

Most importantly know that you can afford to purchase the desired property and feel comfortable moving ahead with the purchase of the off the plan apartment as it could be 2 or 3 years of waiting before the completion of the Melbourne apartment and you want to make sure that this is a period of your life which you enjoy and not stressed out wondering how you may be able to pay for the apartment down the track.

In Summary, the purchase of an off the plan apartment in Melbourne can be a good idea if you are educated in your decision to purchase and the location where the apartment is being constructed. If you are investing in an apartment that is off the plan in Melbourne, make sure you buy based on the numbers and not on your emotions. A location which you personally may not find desirable today may change in years to come and deliver the best capital growth, so rely on your team around you to help making the buying process that little less stressful and a whole lot easier.

To see a selection of over 25 of the plan apartments in Melbourne, visit Find Investment Property.

readmore

Melbourne property still on the up!

Posted by Mark Mendel in Melbourne Property News on 05 5th, 2011

Why is it that everywhere you look at the moment there is negative sentiment about the Australian property market EXCEPT Melbourne!

Melbourne Property has continued to defy the national trend, with another rise in prices recorded as the rest of Australia remains in limbo. The demand for Melbourne property continues to outstrip supply as strong job prospects keep the market buoyant in metropolitan Melbourne according to Rismark’s Ben Skilbeck.

Melbourne’s landlords are also sharing in the strong growth with weekly rentals also on the move up with a 4.8% increase over just the last 6months, the highest rate in the country.

So where are buyers looking. Well many are still focused on the inner city ring, say within 10km from the Melbourne CBD however new figures show that growth in Melbourne’s middle ring suburbs has just outpaced the inner city growth over the last 5 years according to the REIV. The middle ring consists of those suburbs that are 10 to 20km from the Melbourne CBD.

Taking the above into account does not make it any easier to go out and select a new apartment or new home in this proximity from the city as there are many other factors that need to be considered. Proximity to shopping centres, schools and supermarkets is critical for property investors looking not only for long term capital growth but also solid rental returns that will continue to increase over time.

readmore

Melbourne Apartments vs Shares

Posted by Mark Mendel in Melbourne Property News on 02 4th, 2011

In a recent study conducted by Oliver Hume in Melbourne, it showed that apartments and townhouses have outperformed the stock market over the last 30 years. In its report, in measured the return of apartments from September 1980 through to September 2010. The median price of Melbourne apartments rose by an average of 8.9% each year while he share market rose 7.7% on average per year.

They were quick to point out that if they had measured the result up until 2007-08 collapse a different storey would be told with the share market outperforming the property market. The key fact though is to show that over a period of time when there are dips in the economy; property is a safer more reliable investment that doesn’t react as quickly to poor economic news due to the perceived illiquid nature of the investment.

Oliver Hume also indicated that Adelaide and Sydney apartment prices did not perform as well as Melbourne with them increasing on average at 7.1% and 7.4% respectively over the 30 year period.

Andrew Perkins, national research manager of Research at Oliver Hume, said that at various points in the past three decades shares and unit prices intersected during market highs and lows. ”It just shows that the set-and-forget nature of property can provide less-spectacular returns but it also highlights the volatile nature of the ASX,” he said.

readmore

Melbourne Property Outlook for 2010 – 2012

Posted by Mark Mendel in Melbourne Property News on 12 9th, 2010

The Melbourne property market has had a strong run once again through 2010 as many had thought there was going to be a slowdown from previous years of strong growth. One contributor to the continued support for property prices increasing in Melbourne has been the strong population growth. While this has helped fuel the need for more dwellings and helped boost economic growth, a small slow down is unlikely to have any harsh effects. The strong population growth has been largely concentrated in the capital, Melbourne. Melbourne has seen 80% of the population growth while regional areas outside of Melbourne have seen the remainder over the last 7 years.

First Home Buyers in Melbourne slowed through 2010 as expected after stronger than expected results in the second half of 2009. Previously there had been larger incentives on offer for first home buyers and during this time more would have entered the market than average. Since these incentives have been reduced first home buyers in Melbourne have fallen away.

Property Investment in Melbourne surged in the first half of 2010 as strong growth from 2009 attracted more investors in 2010. The Melbourne property market is expected to remain active through 2011.

As first home buyers fall out of the market, this is likely to put pressure on rents. This was seen in the second half of 2010 and is expected to continue in 2011 as demand increases. Melbourne is still comparatively cheap to rent compared to other major cities in Australia. There is a strong chance that we should see rents in Melbourne rise significantly over time to catch up to be in line with other cities around the country.

Moving forward in 2011, capital growth of property in Melbourne is expected to stabilise with the huge growth seen through 2009 and 2010 not expected, although some growth is to be seen.

If you are considering purchasing a new melbourne apartment off the plan, then visit Find Investment Property.

Source: Westpac 2010 – 2012 residential property report

readmore

« Older Entries

Copyright 2010 New Apartments Melbourne | Off the plan Melbourne Apartments. All Rights Reserved.