The market for new apartments in inner-city Melbourne has peaked according to the head of a development firm and member of the BRW Rich List.
In an Australian Financial Review
article yesterday, Ashley Williams, who came in at number 66 in this year’s BRW Rich List and director of development group Evolves, said the market for new apartments in inner-Melbourne has been overcome by a wait and see approach.
“We've come off a peak. There's been a lot of talk about over supply and there being too many small apartments and the market has responded by pulling back,” Williams told the AFR
"The market has pulled back a little from the investor style apartments. You can still sell them, but it’s a bit more subdued. Investors are waiting to see if there is an oversupply,” he told the AFR
Williams also said the impact of Victoria’s new foreign buyer taxes and the foreign buyer crackdown by Australian lenders has also impacted demand.
Williams’ claim of a peak in the market may be supported by recent building approval figures.
Recent analysis from CoreLogic
revealed 31,548 units were approved for construction in Melbourne over the 12 months to July 2016, compared to 25,880 houses. While unit approval did outstrip detached house approvals over the 12 month period, they did fall 7.2% year-on-year.
While approvals have fallen, Kusher said it is still important that those considering a new apartment need to be “very selective” when it comes to buying a new unit in a market such as Melbourne.
According to Williams, Melbourne’s city fringe is an area where buyers are likely to be safer when it comes to buying new apartments.
"In the areas we develop apartments like the city fringe, Carlton, North Melbourne, Southbank and Prahran there's no oversupply,” he told the AFR
“That's got a lot to do with the strengthening established housing market. As house prices continue to climb, there's far greater numbers of people looking at buying an apartment.”