Urbis quantifies the apartment shift to Melbourne's middle and outer suburbs

Property consultants Urbis in their latest Melbourne Apartment Essentials report have provided hard data affirming what many at the coal face of Melbourne's apartment industry have known for some time; apartments have well and truly established themselves in Melbourne middle and outer ring suburbs.

What wasn't known was the degree to which apartment living has taken root in traditionally detached housing areas.

According to Urbis, the March 2017 quarter saw for the first time apartment sales outside the inner city outweigh the more established inner city zone. That is, 58% of apartment sales were registered outside the inner city; a first since Urbis began the Melbourne Apartment Essentials series.

Apartment living is no longer just for CBD dwellers, and precincts like the Inner North, which captured 43% of total inner Melbourne sales, are well set up for apartment living. They provide residents with easy access to transport and neighbourhood character, as well as an affordable entry-point to the market.

Moonee Ponds, Heidelberg and Footscray are all markets that we have seen emerge over the past few years.

Mark Dawson, Director of Property Economics and Research, Urbis
Strengthening sales has led to a robust suburban apartment construction scene

According to Dawson, the increase in apartment activity in middle and outer suburbs can be attributed to destination amenity coupled with infrastructure investment. Add a tightening market for suitable inner city development sites, and the trend of apartments pushing further away from Melbourne's core is expected to continue.

Urbis also cites the shift in buyer preferences as being attributable to push and pull factors. Push factors include a mutually reinforcing market push that nudges purchasers and developers beyond their feasibility thresholds to explore new areas. At the same time, Urbis asserts that pull factors revolve around city-wide urban renewal points such as Sunshine and Monash.

Boosts to transport, planning, and investment around National Employment and Innovation Clusters will invariably pull new residents into these designated development zones.

M-City is an example of a residential project within a designated Cluster. Image: CBRE

Yesterday CBRE announced that M-City in Clayton, an example of a residential project located well beyond the inner city and within a National Employment and Innovation Cluster, had delivered 172 sales over two weekends. The first phase of M-City to go on sale had 175 units in total.

Melbourne Apartment Essentials recorded almost 500 sales from 47 projects in the March 2017 quarter.

Four new projects amounting to 1,471 units launched, whereas the equivalent period last year witnessed 14 developments at 2,878 launch to market. The scaling back of apartment releases is in line with market sentiment, with developers taking a more cautious approach to project releases.

We expect to see fewer project launches which will ensure the market maintains a healthy balance of supply and demand. Of the projects we monitor, 82% of stock has been sold.

At this stage of the market it is not about a large reduction in sales or drop in price, but a change in the type of sales we are seeing and where apartments are selling. After a more subdued quarter in inner Melbourne, we maintain our expectation of a boost in activity prior to the 1 July stamp duty changes.

Mark Dawson, Director of Property Economics and Research, Urbis

The recently completed 9 High within Preston is symptomatic of that suburb's apartment growth

Melbourne Apartment Essentials Q1 2017 snapshot

The Melbourne Apartment Essentials report found:

  • Urbis recorded just under 500 off the plan sales in the March 2017 quarter. Of these, 42% were in the Inner Melbourne area, while 58% were recorded in Melbourne’s middle ring.
  • For the first time since reporting commenced, the majority of inner Melbourne sales were outside of the Central Precinct. The Inner North recorded the most sales (85 sales), followed by the Inner East (53 sales), Central (40 sales), Inner West (17 sales) and Inner South (1 sale).
  • The weighted average sales price for the March 2017 quarter was $706,391, a $44,476 increase compared to the December 2016 quarter. This increase was driven by the volume of two-bedroom product selling.
  • Two-bedroom, two-bathroom product was the most popular, accounting for 35% of total sales, an increase from 29% in the previous quarter.
  • One-bedroom, one-bathroom, one-car product accounted for 18% of total sales.
  • Four new projects launched amounting to 1,471 units this quarter, compared to seven projects amounting to 3,741 units at the end of the June 2016 quarter. Launches have decreased as the market self-regulates, although we have been expecting to see a short term rebound to beat the stamp duty changes on 1 July.

Development & Planning

Thursday, November 23, 2017 - 00:00
The City of Melbourne earlier this week agreed to provide conditional support for MAB Corporation's NewQuay West Development Plan via its Future Melbourne (Planning) Committee. The revised development plan prepared by DKO Architecture and Aspect Studios was driven by the development of the Ron Barassi Senior Park which necessitated a revisiting of the precinct layout and urban structure.

Policy, Culture & Opinion

Monday, November 20, 2017 - 12:00
The marriage of old and new can be a difficult process, particularly when the existing structure has intrinsic heritage value. In previous times Fitzroy's 237 Napier Street served as the home of furniture manufacturer C.F. Rojo and Sons. Taking root during 1887, Christobel Rojo oversaw operations though over time the site would become home to furniture manufacturer Thonet.

Visual Melbourne

Friday, August 25, 2017 - 07:00
The former site of John Batman's home, Batman's Hill is entering the final stages of its redevelopment. Collins Square's final tower has begun its skyward ascent, as has Lendlease's Melbourne Quarter Commercial and Residential precinct already. Melbourne Quarter's first stage is at construction and involves a new 12-storey home for consultancy firm Arup along with a skypark.


Transport & Design

Friday, November 24, 2017 - 00:00
Leslie A. Martin , University of Melbourne and Sam Thornton , University of Melbourne Road congestion in large Australian cities is estimated to cost more than A$16 billion a year . Economists have long argued the best way to improve traffic flow is to charge drivers for their contribution to road congestion.

Sustainability & Environment

Tuesday, October 24, 2017 - 12:00
Cbus Property's office development for Medibank at 720 Bourke Street in Docklands recently became the first Australian existing property to receive a WELL Certification, Gold Shell and Core rating. The WELL rating goes beyond sustainable building features with a greater focus on the health and well-being of a building's occupants.