High stakes for Melbourne’s apartment liveability & affordability

The overhang of unsold stock remains steady, but has diminished compared to a year ago, reflecting the slower rate of replenishment of new stock in recent quarters.

The percentage of available stock sold has maintained a steady average of 14% over the last 12 months extending to Q3 2018. While the volume of apartments approved in Q3 2018 was 811, representing a new low since the publication began four years ago and well down from the recent peak in Q2 2017 of 10,391.

Mr Dawson commented on the shifting supply and demand dynamics, he said, “While supply still has a nose in front, demand is expected to gain ground as new supply runs into the credit fence facing buyers and developers. So, whilst there is the risk of a short-term hangover from regulatory changes, the risk of an overhang of stock starts to diminish.”

As Victoria’s focus shifted to the next big race in town, the state election, two key themes stay top of mind: Liveability and Affordability. 

The data in this publication serves as a useful reminder on several fronts. Firstly, that apartments present a relatively affordable option, enhancing access to our most liveable neighbourhoods; In six out of nine precincts assessed in the Urbis Apartment Essentials, the weighted average price of new apartments is less than half of the median house price

Secondly, development close to jobs and transport makes good city sense but does require supporting services and infrastructure. Rising costs and supply constraints present risks to delivering the affordable homes we need in our most liveable suburbs – only 19% of active supply is in presales as tighter credit controls have slowed the rate of launches in the last year and this continues to raise questions about the delivery timing of future housing.

And finally, affordability and liveability can be as much about rents as it is about prices as where and how we choose to live changes over time. Continued low vacancy rates and growing rents are a reminder we need to unlock new ways of delivering supply to accommodate growing underlying demand, even when and especially when, purchaser demand runs at a steadier pace.

• Surveyed project volume: 10,000
• Number sales analysed in the quarter: 330
• Weighted average sale price recorded: $601,000
• 1,415 apartments approved in the quarter