Key infrastructure initiatives underway are expected to boost new apartment stock levels. The North East link, for example, is understood to deliver express bus lanes and a long-awaited link between the northern and south-eastern suburbs. As a result, the pipeline is looking bright, with 8,000 approved apartments divided between the Northern and North-Eastern Corridors.
With the Westgate Tunnel and Melbourne Metro Rail still to come, the apartment pipeline is expected to gain momentum linked to these areas as more sites are released and connections improve further.
Melbourne is investing in infrastructure to support the high rates of growth that have been driving housing demand so strongly in recent years. We can see that playing out with opportunities for greater density, liveability and affordability in major urban renewal areas around the city that leverage the NEICs and transport investments.
Despite a growing apartment pipeline, half of which are planned to be two-bedroom products, one-bedroom products were the most popular selling product i the quarter, accounting for 50% of sales. Two-bedroom products are likely to make a comeback soon as the future supply indicates. The North Eastern Corridor has a strong three-bed pipeline, accounting for 20% of future supply in the precinct.
Mr Dawson commented, “Surveyed sales activity leant towards smaller apartments amidst housing affordability pressure, with the fastest selling projects delivering a weighted average price below $700,000 in the quarter.”
Approvals continue to taper off and there will come a time when the slower supply catches up with renewed demand. Therefore, we expect to see more launches throughout the year ahead as developers jostle for position to time the rebound in activity.
Approximately 2,000 new apartments are expected to launch in 2019 with 600 alone in quarter two.