Melbourne-developer Kokoda Property has prompted calls for more in-fill development sites in what it calls "Melbourne’s undersupplied eastern middle-ring" in order to fill the demand for quality apartments and townhomes in the leafy suburbs.
This follows the sales success of Kokoda’s Trentwood development in Glen Iris, Boroondara, which has achieved sales of 95 per cent within 10 weeks of its launch to market. Owner occupiers who were priced out of the established market or looking to downsize from their family home were the most active buyers in the development.
Trentwood is located 10km from Melbourne’s CBD, in the municipality of Boroondara, where planning scheme constraints mean only six per cent of its land is zoned for subdivision and apartment development. The site is adjacent to Burwood Station and nearby bus routes, which are all within walking distance. According to the City of Boroondara, 36,000 new residents are forecast to move into the area by 2041.
The one, two and three-bedroom apartments provide an affordable but still high-end opportunity to live in this tightly held suburb. A study by Urbis has found that units in Glen Iris have experienced a 5.16 per cent median capital growth per year over the last 10 years. The Real Estate Institute of Victoria places its median house price at 1.78 million in the June quarter of 2016.
According to Sam Tucker, Sales and Marketing Director at Kokoda Property, the demand in these suburbs is being mainly being driven by downsizers who wish to stay in suburbs they have created communities in. These purchasers no longer have the need for large houses with big back gardens and want the freedom to lock up and travel when the opportunity arises.
Apartment living affords them all the high-quality amenity and lifestyle options without the burden of caretaking their residences themselves.
Tucker adds that it is also important to this demographic to be well-connected to the city and surrounding areas via public transport, and have conveniences such as cafes, retail and entertainment options close by. Middle-ring suburbs deliver this amenity while still providing a relaxed and comfortable lifestyle.
The reality is that demand is at an all-time high in Boorondara but due to scarcity of supply buyers are getting priced out of established homes and there is little by way of high quality apartments and townhomes providing more affordable opportunities for purchasers to get their foot in the door.
In the case of Trentwood we created a project that fits in with the heritage of the neighbourhood and is designed for long term living . The response was astronomical with 95 per cent sold within the first 10 weeks.This indicates to us that there is sustained demand for new apartment product of a high quality nature that appeals to owner occupiers, however, due to the current planning regulations there is absolutely no way to deliver what the market needs.
There is a low supply of new apartments in Glen Iris and a strong demand for quality. Boroondara has a strong history and it was vital we created something that sat quietly in the neighbourhood.
- Sam Tucker, Sales and Marketing Director, Kokoda Property
Tucker says Glen Iris's appeal to Kokoda and in turn prospective purchasers can be attributed to it being a beautiful heritage suburb with great connectivity and amenity.
(Glen Iris) also has a strong local owner occupier community and is in demand from first home buyers through to downsizers. We especially liked this infill site because of its unique elbow footprint which affords an exceptional façade design and the connectivity to both freeways and train lines for our purchasers.
Trentwood has been designed by architecture firm Hayball with interiors by the widely renowned Carr Design Group, and features only 88 apartments. Kokoda engaged Hayball and Carr following the successful collaboration on the Evergreen development in Ivanhoe that has just reached completion. This was a very successful collaboration according to Tucker, with the the project sold out very quickly in large part due to the high quality of the design.
We love the quality of work this team produces and we were keen to continue this success at Trentwood. The team has an intrinsic understanding of the design needs of the area’s demographic and a unique perspective on designing for the local owner-occupier.
Moving forward, Tucker says that these established middle-ring areas are a strong focus for Kokoda and its future pipeline of work. Kokoda undertake an extensive due diligence and mapping process to understand the demographics of an area. Through this, they can determine what design and amenity features are in demand and ensure we are providing this for purchasers.
One of the key drivers for us is finding sites that are well connected and have considerable established amenity. These fundamentals do not change throughout market cycles and always underpin demand.