With all the talk about an oversupply looming in the Melbourne property market, our iBuyNew CEO Mark Mendel
talks to The Real Estate Conversation
about why Melbourne actually faces an apartment shortfall
According to Mark Mendel, the demand for larger apartments is increasing due to both families and downsizers looking for more affordability and lifestyle benefits that apartment living can provide.
Approximately 140,000 apartments were approved for construction in Melbourne between 2016 and 2018, according to Commonwealth Bank figures, however only 35,000 of these will be completed says Mr Mendel.
This means that Melbourne is actually still facing a shortfall of new apartments
, despite the strong growth in apartment approvals, and the rapidly rising population, which is the fastest growth in the country.
It is important to note that although thousands of apartments have been approved for construction, many of these will never get off the ground, so expectations are massively inflated. Many developments don’t end up going ahead due to developers unable to achieve funding, whilst other builders have no intention of building the project at all.
"Developers (are) finding it tougher to be approved for finance, especially if they have little or no experience,” said Mendel.
As apartments are generally more affordable compared to houses, more and more people are choosing to live in them as owner occupiers, including young professionals, families and retirees. Having transport, amenities and good schools close by is also another major drawcard for apartment living, which is becoming the new trend.
According to Mr Mendel, “Melbourne will not be seeing an apartment over-supply crisis anytime soon. Under-supply of high rise apartments in the future is more likely than an apartment over-supply.”
You can read the full article here: "Melbourne faces apartment shortfalls as approvals fail to complete
To learn more about Melbourne’s undersupply of apartments, read our top five reasons here: “Why Melbourne does not have an Apartment Oversupply