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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.

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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.

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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.

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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.

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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.

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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.

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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

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Fifty Albert Apartments – South Melbourne

Posted by Mark Mendel in Melbourne New Apartments on 08 16th, 2010

Fifty Albert is located on Albert Rd in South Melbourne and is set to be one of the most unique apartment developments in the area by the time it is completed in mid 2013.

Fifty Albert is a 294 apartment development with amenities which you would usually find in a 5 star hotel. Some of these amenities include Hot tubs, sauna, Gym, Yoga room, poker room, roof top kitchens, BBQ area, business centre and more.

Fifty Albert apartments have been designed by the renowned architectural firm Ellenberg Fraser.

Fifty Albert sits in a peaceful pocket of Albert Rd, between St Kilda Rd and Kings Way in South Melbourne. It is less than 2km from the Melbourne CBD and walking distance to:
– Royal Botanical Gardens, Albert Park and Fawkner Park.
– Shops, cafés, restaurants and bars on St Kilda Rd, Clarendon St, Toorak Rd and Domain Rd.

The Fifty Albert apartments will have great access to:
– Melbourne’s public transport network
– Major arterials (West Gate Freeway, Monash Freeway, Dandenong Rd, Princes Hwy, Docklands Highway and Kings Way).
– Universities (Melbourne Uni, RMIT).
– Schools (Wesley College, Melbourne Grammar, Macrobertson High School).
– Melbourne’s famous sports facilities (MCG, Telstra Dome, Rod Laver Arena, Melbourne Aquatic Centre).

Fifty Albert will contain 294 one and two bedroom apartments across levels 8?28 of a 28 storey building. There will be seven typical apartment types and all floors are the same layout. Property Investors and home buyers will have a choice of three quality finishes schemes – dark, light and a combination. There is also a proposed ground floor café and produce store.

This is a very exciting development in the South Melbourne area.

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Melbourne – Update July 2010

Posted by Mark Mendel in Melbourne Property News on 08 13th, 2010

The Melbourne property market is still continuing to outperform other states when it comes to the median price of property. The major factor this is occurring is due to the significant population growth that is occurring in Australia’s second biggest city. There are currently over 5.4million people living in Victoria and this is growing by around 115,000 a year or 2,200 people per week. With new development only bringing 52,000 new dwellings to the market, a shortage of homes is pushing prices up with rental returns following.

Melbourne has invested significantly in planning and infrastructure to make the most of the growing population and build the city in a controlled manner. Based on the current numbers it is expected that Melbourne could overtake Sydney as the largest city in Australia within the next decade. This is not hard to imaging as the city of Melbourne is such a fantastic place to live with a diverse culture that is different to every other city across the nation.

Infrastructure spending is occurring throughout the state with major developments such as the $4.3billion Regional Rail Express project linking Geelong, Ballarat and Bendigo with Melbourne via a dedicated express train service.

Stamp Duty savings when buying off the plan in Melbourne have really helped grow the city. Many investors both nationally and internationally have benefited greatly from these savings and it has encouraged developers to bring new developments to market as quickly as possible. The fascination with Melbourne internationally stems to the Asian regions o the world where thousands of international students come to Melbourne to complete bachelor and masters degrees with many applying for permanent residency after they have finished. This elite influx continues to help grow the city which helps local commerce driving the sate to become better than it has ever been before.

With many new developments being built in Melbourne in the city, city fringe and regional areas, it is important when investing to look for something a little unique and something that is going to continue to be in high demand I the future. Some building amenities can make the difference between another average building in Melbourne and something special that will outperform other similar buildings in years to come.

If you are looking for new apartments in Melbourne it is worth visiting Find Investment Property.

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Melbourne Home Buyer Show – Post Show Review

Posted by Mark Mendel in Melbourne Property News on 08 9th, 2010

Based on the results achieved form the Melbourne Home Buyer Show, it looks like the Melbourne property market will be strong for a long time to come. There was a fantastic turnout with over 12,000 people walking through the doors…thats almost a 25% increase on the numbers from last year. It really shows that people are doing their research before buying and looking at what opportunites are available in the market.

A more detailed analysis of the Home Buyer Show will be available soon and updated on this post however in the mean time we just wanted to let you know that based on the level of interest from prospective buyers, the market in Melbourne is still strong despite what some media outlets are trying to convey.

For those of you that still don’t manage to find the right property to purchase in 2010, dates for the 2011 Melbourne Home Buyer and Property Investors show have been confirmed for October 7th to October 9th 2011.

For those of you that are in Sydney, the Sydney Home Buyer and Property Investor Show will be held from Friday 29th to Sunday 31st October 2010.

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