The number of houses sold in Melbourne last year was the lowest since the mid-1990s, according to new figures from Land Victoria. Its Annual Guide to Property Values shows that 53,112 houses were sold in Melbourne last year, a fall of 13.35 per cent on 2009. It is a far cry from 2001, when the market was at its peak with 70,137 houses sold. Despite the fall in numbers, median prices and total values still rose. Victorian Valuer-General Robert Marsh said the total value of sales of all property in Victoria increased 1.4 per cent from $74.62 billion in 2009 to an estimated $75.68 billion last year. In Melbourne, the median jumped 18 per cent from $420,000 in 2009 to $495,000 last year. In general terms, for the past 10 years house prices have continued to grow, with Melbourne’s median house price rising 160 per cent – from $190,000 to $495,000 – between 2000 and 2010. The total number of units and vacant house block sales also fell last year. More than 25,000 units were sold in Melbourne, the lowest since 2004, while 12,473 house blocks were sold, a 43 per cent decline on 2009. It was the lowest number of vacant house blocks sold since 1996. Unit/apartment median prices in metropolitan Melbourne rose 12.6 per cent compared with 5.5 per cent for unit/apartment prices in country Victoria. Metropolitan house block prices rose $20,000 to $185,000. NEW APARTMENT COMPLEX The north end of the CBD is the latest Melbourne area to become home to a new apartment complex. Fulton LN is a 700-apartment project from Malaysian company S.P. Setia, set in Fulton Laneway between Franklin and A’Beckett streets. In its first foray into Australia, the company said the 107m tall building would deliver a mix of residential, commercial and retail tenancies. The distinctive architecture by acclaimed Karl Fender (FKA, Melbourne) offers one, two and three-bedroom apartments, a green arbour facade, garden terrace, gymnasium, pool, theatrette and an exclusive entertaining and dining space inspired by Melbourne chef Adam D’Sylva. Like most new developments, the environment is high on the agenda, with bicycle facilities, grey-water recycling, a water tank, natural ventilation, green wall and an average six-star energy rating. Prices start at $370,000 for one bedroom at 45sq m, $515,000 for a two-bedroom starting at 60sq m and $1,050,000 for three-bedroom dwellings starting at 115sq m. Details: www.fultonlane.com.au MORE FIRST-HOME BUYERS A softer housing market and stable interest rates are luring more first-home buyers into the market, according to mortgage broker Loan Market. Spokesman Paul Smith said 35 per cent of the company’s inquiries last month came from first-home buyers, a 10 per cent increase on May. “We have gone eight months without an interest rate rise and this has not only given a much-needed reprieve to households dealing with increased costs of living, but has encouraged those looking to purchase their first home,” he said. Mr Smith said Loan Market’s inquiries from investors were up 20 per cent in [...]
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The news that developers are paying record prices for scarce high-density residential development sites will come as no surprise to anyone who drives around Melbourne and sees the building activity. The demand comes as Victoria’s strong economy and Melbourne’s reputation as the second-most liveable city in the world (according to The Economist) continue to drive nation-leading population growth, says Savills Australia. And the demand is not limited to local buyers, with economic and political stability and comparatively affordable land prices adding to the attraction for off-shore developers, Savills divisional director Nick Peden says. “Melbourne has all the fundamentals in place for residential development,” he said. “The economy is sound, recent population and employment growth have both been nation-leading and historically low CBD office vacancy indicates a further vote of confidence from the business community. “All of these factors have contributed to a huge demand for new housing and a consequent shortage. “The problem is we don’t have enough development sites available and the upshot has been record prices being paid for residential development opportunities all over Melbourne.” Melbourne is set to grow enormously over the next 15 years. The Australian Bureau of Statistics forecasts Victoria’s population will grow by about 1.6 per cent a year until 2026, meaning an extra 1.5 million people will need accommodation, mostly in Melbourne. Savills has recently sold several high-profile residential development sites around Melbourne, setting land-value records for their specific locations. Previous highs of $2000 a sq m in Doncaster and $10,000 a sq m at Southbank have been well and truly passed. Mr Peden said comments by Head of Treasury Martin Parkinson this month that “Australia is about to enter a boom that should last decades” had not been lost on foreign developers who had been increasingly active in the market. “There is no doubt that Australia’s economic credentials – having sailed through the GFC relatively unscathed – are looked upon very favorably by the international community and, in this case, developers in the Asia-Pacific region, who are also attracted by land prices that compare well with their local prices,” he said. Mr Peden expects land values and demand for high-density development sites to continue to increase this year. DIFFERENT OUTLOOK The news in the established homes market, however, is quite different, with a new report revealing what just about everyone in Melbourne knows – the market has shifted back in favour of buyers. The inaugural Home Buyers Index from Commonwealth Bank and RP Data shows national property values fell by 2.1 per cent nationally during the first quarter of 2011 fuelled by weak results from January and February. Melbourne fared better than just about all other capital cities, with prices dropping 1.5 per cent. Commonwealth Bank’s Michael Cant said selling conditions in Melbourne had been moderating since June last year when homes were selling quickly and buyers had little room for negotiation. “Melbourne market conditions have now moved to a fairly neutral position where buyers and sellers are reasonably evenly balanced,” he said. [...] CARDINIA is the most affordable growth area for house-and-land packages in Melbourne, a city-wide study by the Oliver Hume property group has found. The study shows a median package price of $384,000 in a market that appears to be easing slightly in the latest quarter. But for anybody who bought land a year ago, things still look quite comforting. From a median price of $166,400 for a block in March last year, the figure has moved to $185,000 – an increase of 11 per cent. And the odds are last year’s block would have been larger – 672sq m against today’s median of 448sq m. The only slightly unsettling thing is that the present median for land is after a $6000 fall in the latest quarter. But Hume’s national research manager Andrew Perkins said there was little to worry about. “The market has finally taken a breather after two years of higher than average price growth,” he said. “The stabilisation of prices has been accompanied by an increase in retail land supply. “While prices have stabilised, land supply has continued to increase since June last year. “There were about 1500 lots on sale at the end of March, equating to 250 lots for each council area and 18 lots for each project. This is more than double the number in June last year. Casey property values made gains during the year. The median land price rose 13 per cent from $204,000 to $231,000 in the 12 months to March this year. Like Cardinia, median land sizes shrunk from 586sq m to 448sq m. The fall in land prices in the March quarter was a more conservative $1225. “The gap between demand and supply has continued to decrease in both areas and buyers are being offered a much better range of lots than they were a year ago and that has impacted on the latest quarter’s results,” Mr Perkins said. [...] ESSENDON has cemented its place on the exclusive list of suburbs with a median house price of more than $1 million. The suburb registered a median sale value of $1.05 million in 2010, according to the Real Estate Institute of Victoria The suburb first hit the $1 million mark in the 2010 September quarter, but the REIV says the annual figure gives a picture of the suburb’s true value. Essendon’s median value was $555,500 in 2005, placing it among the top 20 for growth suburbs over the past five years. In an example of what the median house cost could buy, a modest renovated weatherboard in Elder Pde Essendon, pictured, sold in October last year for $1.18 million. Three other Moonee Valley suburbs were named among Melbourne’s top 20 for median house price growth over the past year. Real Estate Institute of Victoria data shows Keilor East registered the second-highest jump in median value in 2010, reaching $620,000. This is up 31.6 per cent from $471,000 in 2009. REIV spokesman Robert Larocca said the new Essendon median was due to a mix of factors. “Part of it is a catch-up from a fall in property values,” Mr Larocca said. “Captured in that bunch of sales is when the market bottomed out in the early part of 2009, but the second part of the increase is real growth.” But the massive increases appeared over for now, he said. Fabian Rosan, partner with Nelson Alexander Essendon, agreed it had been a good 12 months for real estate agents in Moonee Valley, particularly those selling in his home suburb of Keilor East. Ample stock meant houses would continue to sell well in Keilor East, Mr Rosan said, but he agreed the house price increases would be nowhere near the heights of last year. Jude De Araugo, from Mortgage Choice Moonee Ponds, said it was important borrowers didn’t over-extend their budget. “Dollar-wise, I call (Essendon) the Toorak of the north-west. That’s the only way I can describe it,” Ms De Araugo said. She said loan repayments needed to balance with quality of lifestyle. “We recommend taking a stepping stone into the market, rather than going in big.” Is the dream of owning a house beyond reach? Tell us at mooneevalleyleader.com.au [...] |
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