MELBOURNE MULTI-DWELLING RESIDENCES

Market Supply, Market Demand: Market Imbalance. Will Melbourne Apartments hold their value?


Melbourne apartments have been growing strongly since the millenium, but lack of appropriate planning and stakeholder management has given rise to a series of problems, culminating in the city having an excess of multi-dwelling residences. Market equilibrium has been slipping since 2010-11 (see chart 1 and 2). As many developments in Melbourne's Docklands approach completion ( Q1 2016-17 - the end of our current forecast series), Paul M. Ross forecasts that this area will contribute to Melbourne's already saturated apartment market. From a risk management perspective, capital gain yields on Melbourne apartments are likely to continue struggling, notably in and around Docklands, (postcode 3008); a prospect of continued concern to many investors, lenders and consumers.


Where did it all begin- and go wrong?


 In the aftermath of Melbourne's failed attempt to secure the 1996 Olympics in 1989, the Kennett Government (1992-1999) simply let property developers run riot and as a result, today, Docklands (the proposed Olympic site) is void of any sense of place. For almost 10 years (1999 - 2008) developers constructed Docklands as they saw fit. The Brack's Government (1999-2007) took a back seat on the premise that market dynamics would make things turn out right. They didn't. Things got worse.


Intervention of the State

<...

Read more

Date posted: 2014-01-14 | Comments(0)


Sydney Stand Alone Homes, 2006 - 2016

In Sydney, building approvals for stand-alone homes continued its upward trend in September 2013. In a city where 56.2% of housing stock is stand-alone, this steadypipeline of detached housing has, and continues to be, driven by a combination of business and consumer sentiment, changesin land-use planning and policy, but also demography - specifically the changing life cycle stages of demographic segments.

Demography is not particularly understood in mainstream society with the market research term 'demographics' acting as a surrogate to explain all things people. Despite a wealth of anecdotal and empirical information in circulation about demographics and residential property, the patterns and geographical compositions of what define and shape our communities are not really understood or commonly available.

Slicing the population into 7 demographic groups,research findings reveal the changing residential composition of how people choose to live. Looking specifically at stand-alone homes between September 2006 and September 2013, 131,000 additional people in Sydney live in this style of residence. Strong growth was common to the 55-64 and 65+ segments (see chart 1), but given the life cycle stage of these segments, their growth can be largely attributed to 'ageing in place'.

Chart 1: Demographic composition of persons living in stand-alone homes, 2006 - 2016

Read more

Date posted: 2014-01-14 | Comments(0)


Melbourne Stand Alone Homes, 2006 - 2016


In Melbourne, building approvals for stand-alone homes remained above the 2 year average in September 2013. In a city where 68.8% of housing stock is stand-alone, this pipeline of detached housing has been picking up since early 2013 despite, being driven by a combination of business and consumer sentiment, changes in land-use planning and policy, but also demography - specifically the changing life cycle stages of demographic segments.

Demography is not particularly understood in mainstream society with the market research term 'demographics' acting as a surrogate to explain all things people. Despite a wealth of anecdotal and empirical information in circulation about demographics and residential property, the patterns and geographical compositions of what define and shape our communities are not really understood or commonly available.

Slicing the population into 7 demographic groups,our research findings reveal the changing residential composition of how people choose to live. Looking specifically at stand-alone homes between September 2006 and September 2013, 222,000 additional people in Melbourne live in this style of residence. Strong growth was common to the 55-64 and 65+ segments (see chart 1), but given the life cycle stage of these segments, their growth can be largely attributed to 'ageing in place'.

Chart 1: Demographic composition of persons living in stand-alone homes, 2006...

Read more

Date posted: 2014-01-14 | Comments(0)


Australian Capital Cities: Inward and Upward

By far most of Australia's growth is in our Capital Cities. Data from the 2011 Census show that 71.9% of Australia's population growth has taken place across the eight Capital Cities. Melbourne captured 30.8% of this growth, followed by Sydney (23.4%), Perth (17.9%) and Brisbane (17.4%).

With more of us wanting to live closer to city centres, it seems the only way is up. Contemporary urban design is reflective of this changing consumer trend with a growing number of multi-dwelling and high density residential property developments populating our city scapes.

Capital gains

Absorbing an additional 370,000 people into its city limits, Melbourne's share of Australian business investment and supply of affordable housing has attracted a large number of people. Rising levels of fertility since 2006-07 and a growing ratio of Australia's net overseas migrants treating Melbourne as their arrival city are the demographic ingredients fuelling its growth.'Persons per Dwelling' (see Table 3 and 4) reveal supply/demand equilibrium for Separate Houses, whilst Townhouse and Apartment stock have been outpaced by population growth.

The 'Sydney vortex' exerts much influence on Australia's economic and social fabric, but high costs slowed the city's rate of population growth between 2006 and 2011 to 6.8% compared to 10.1% for Melbourne, 11.1% for Brisbane and 14.2% for Per...

Read more

Date posted: 2014-01-14 | Comments(0)


Blog Categories