Why is apartment demand in Melbourne still strong?
According to new data released by realestate.com.au, the demand for new apartments nationally has increased by 10.7 per cent over the past 12 months, with Melbourne taking the lead and at its highest level.
The research showed that customer demand for inner-city areas was still strong and Port Melbourne, the CBD and Fitzroy North are Melbourne’s hotspots when it comes to buying new apartments.
What is spurring on Melbourne apartment demand? One of the main reasons for this increase in demand is due to the rapidly growing population. The population of Melbourne over the next 35 years is expected to grow by 95,000 people every year and will reach 7.7 million residents. This puts added pressure on the housing market to deliver more new properties in order to house this influx of new residents.
Urban Development Institute of Australia’s Victorian chief executive Danni Addison said, “Therefore, pressure will be on the availability of developable land.”
Recently, Melbourne has also been named the world’s most liveable city for the sixth year in a row by The Economist Intelligence Unit’s Liveability Survey 2016. This is a major attraction for not only new residents flocking to live here and soak up an enviable and well-connected lifestyle, but also tourists visiting this eastern state.
The research also unveiled that Melbourne was still the number one destination for Chinese home buyers seeking Australian property. In particular, Chinese buyers were concentrating specifically on Glen Waverley, Doncaster and Box Hill, although demand has started to slow.
“The research tells us that housing in the established and outer suburbs remains high. Therefore, policy measures need to ensure that the industry is able to provide the housing people want in a way that limits upward pressure on price,” said Ms Addison.
So, why should you be buying apartments in Melbourne today? Here are 9 great reasons you should consider first if you are thinking about buying apartments in Melbourne.
9 Great reasons to buy in Melbourne today
1. World’s most liveable city for 6 years in a row Melbourne has been named the world’s most liveable city for the sixth year in a row by the Economist Intelligence Unit’s Liveability Survey, making Melbourne’s lifestyle an easy sell for owner occupiers and property investors. There are plenty of green open spaces, efficient public transport, strong cultural diversity and lifestyle amenities that make Melbourne attractive to live, work and play.
2. Strong and stable economy Melbourne has a strong and stable economy and according to SGS Economics and Planning, the Victorian capital is one of Australia’s leading economies, outperforming Sydney and Perth with an annual growth rate of 3.1 per cent. There is a growing professional services sector, particularly within the Southbank and Docklands area, whilst new apartment developments are contributing to a booming construction industry.
3. More affordable than Sydney Compared to Sydney, Melbourne is still much more affordable to buy property and there are still plenty of great deals available. Currently, the median dwelling price in Melbourne is $590,000, with the median house price sitting at $641,500 and units at $485,100. In comparison, Sydney’s median dwelling price is approximately $785,000, with the median house price at $890,000 and the median unit price at $675,000.
4. Exciting new developments and infrastructure There are plenty of new developments and infrastructure underway or proposed for Melbourne to support a growing population. Some of these developments include Fishermans Bend, Melbourne’s largest urban renewal project expected to complete by 2050 and to house approximately 80,000 residents.
The Victorian Government is also committed to ongoing investment in the transport infrastructure with projects including delivery of a new underground, high speed rail line, $5.5 billion Western Distributor Project and the Monash Freeway Upgrade.
5. Strong population growth According to data released by the Australian Bureau of Statistics (ABS), Melbourne is officially Australia’s fastest growing capital city with the city growing by 91,600 people between 2014 – 2015, an average of 1,760 people per week. At this current rate, Melbourne is expected to be Australia’s largest city by 2056, overtaking Sydney. Victoria’s population is set to hit 10 million by the 2050s, whilst Melbourne’s population will double by 2031, fuelling demand for new property. It is estimated that the city will require another 2 million homes to accommodate this growth.
6. Low urban density Melbourne is one of the lowest-density cities in the world, boasting a vast land stretching over 90km from north to south and 100km from east to west. This provides more areas to build on, compared to Sydney which is restricted by the harbour and the mountains.
7. Low interest rates Interest rates are still at an historic low of 1.50 per cent, making owning a property and paying a mortgage much more attractive. Lower interest rates will make the mortgage repayments significantly lower over the lifetime of the mortgage, and there are predictions that interest rates may even crop lower before going up.
8. Government Incentives When buying new property, there are also many government incentives you can take advantage of too. First home buyers can make use of the first home owner grant which can save eligible buyers $10,000, whilst there are stamp duty concessions that buyers of new property and off the plan can utilise too.
9. Auction clearance rates still high Melbourne is still experiencing high auction clearance rates, with the city hitting 78.5 per cent over the weekend ending 16 October 2016. The demand is still high for apartments and property and owner occupiers and investors both on the hunt for property.
With apartment demand increasing across Melbourne and Victoria, fuelled by a surging population, and the state enjoying a strong and stable economy with plenty of new infrastructure and developments, the city is still an attractive place to buy. Property buyers therefore should not worry about this so-called oversupply of apartments in Melbourne. Yes, there might be a number of developments completing at the same time, but with almost 95,000 new residents expected in Melbourne every year, this won’t last long and an underlying apartment demand will still be there.
There are still plenty of affordable opportunities in the property market, and if you want to learn more details about the best places to invest in property today, then it’s best to speak to one of our expert Melbourne Property Consultants who can assist you fully.
Call the iBuyNew team today to learn more about buying Melbourne property and the recent demand for new apartments in Melbourne and across Australia.
Call us on 1300 123 463 to discover more.
Published on 17th of October 2016 by Marty Stanowich