Australia Property

[Boon]

Residential Commentary – Melbourne Apartment Market
April 2017
By JLL
 
http://www.jll.com.au/australia/en-au/Re...202017.pdf
 
Outlook
 
Apartment price growth will remain limited over the next 18-months as Melbourne absorbs the large additions to stock coming onto the market this year. It is likely that a number of projects that are pre-construction will not proceed largely due to  further measures placed on investor purchasing during the quarter.
 
Developers will continue to struggle to achieve pre-sale targets as investors, the largest group of apartment purchasers in Melbourne, are hindered by regulations and financial constraints. The removal of stamp duty concessions and limits on interest-only lending are likely to deter apartment investors. While development funds have been set up by alternative lenders, the size of these funds are also unlikely to account for the amount and scale of projects in Inner Melbourne.
 
Boutique projects or those which emphasis apartment size and occupier amenity are still likely to proceed to construction. With investors being the main target of regulatory changes, developers will further target owner-occupiers.
 
Despite hindrances to investors, housing affordability remains a key issue in Melbourne. Over 100,000 residents are anticipated to be added to Victoria’s population each year to 2031 with the majority expected to reside in Melbourne. Without significant public transport infrastructure that connects the ‘sprawling suburbs’ to employment, demand for inner-city housing and apartments will regain momentum in the medium term.
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