Property expert warns of apartment undersupply

by Miklos Bolza13 Dec 2016
Melbourne is suffering from an undersupply in certain areas, warned Tim Gurner, founder of luxury property developer, Gurner.
 
In an interview with the Australian Financial Review, Gurner went against the Reserve Bank, the major banks and a large swath of Australia’s financial analysts by saying he had witnessed a higher level of demand firsthand.
 
Within 10 days of advertising 150 rental apartments on the market, he had seen 55,000 online views and 1,500 enquiries, he said.
 
“Most importantly, we opened two apartments on Saturday and Sunday [last weekend] for the first time and had more than [prospective] 450 tenants come through. We were absolutely run off our feet as we expected only 20 or 30.”
 
“The weekend's response is like nothing I have ever seen before in my 15 years in the industry – we could have leased the project 10 times over, it is absolutely astounding.”
 
While concerns about an oversupply of Melbourne apartments have been reported frequently over the past few months, Gurner said this was untrue for better quality developments in suburbs just outside of the city’s CBD.
 
“I have been saying for the last 12 to 18 months that I believe there is an undersupply of apartments in the inner city in contradiction to all media reports,” he told AFR.
 
“To date I have only been able to prove that with our sales evidence, however now we have real evidence at completion that there is also a huge demand from tenants.”
 
Figures by the Real Estate Institute of Victoria (REIV) have also indicated that demand for apartments is higher in suburbs on the fringe of the city centre rather than in the CBD itself.
 
For instance, the recorded vacancy rate in the CBD is 3.3% compared with 2.5% for suburbs four kilometres from the city centre and 2.1% for areas more than 10 kilometres out.
 
Related stories:
 
Westpac rejects apartment oversupply fears
 
A third of planned Inner Brisbane apartments dropped
 
RBA warns of inner city mortgage risks

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