Research on Commercial Real Estate of Melbourne

The latest data from the Real Estate Institute of
Victoria (REIV) reveals that Melbourne’s median
house price has skyrocketed past three quarters
of a million dollars, to reach a new record high
of $770,000.
This figure represents an increase of 5 per cent
in the three months to December 31 2016,
while units jumped up 3 per cent across the
same timeframe, reaching a new median of
$563,500.
Most impressively, growth was consistent
across the state, with annual price increases
recorded in both regional and metropolitan
markets throughout Victoria:
f you’re keen to buy into the Victorian property
market and you’re encouraged by these
promising quarterly and annual growth rates,
you may be eagerly browsing our classifieds to
find your next home or investment property.
Before you get too invested in the idea of
owning your own slice of Victoria, it’s important
to understand the risks present in the market at
present.
Right now, many industry insiders believe that
Melbourne (and Brisbane) are at risk of
oversupply, specifically in the apartment
market.
In a recent survey by comparison website
Finder, an overwhelming majority of 26 housing
experts and economists surveyed said they
believe there is an oversupply of apartments in
these two cities.
Of those experts surveyed, 75% agreed that
there are too many apartments in Melbourne.
Despite these concerns, which many in the
industry have been voicing for some time,
Victoria broke a record for the highest level of
building approvals in September 2016. A recent
report by the Commonwealth Bank suggest
shows that construction work in Victoria in the
most recent quarter up by 16.6 per cent on
‘normal’ levels, while Victorian starts are 20.1
per cent above decade averages.
Does this mean you should avoid buying
Melbourne apartments altogether? Not
necessarily.
<strong>Research</strong> from Angie Zigomanis at BIS Shrapnel
has found that in inner Melbourne areas—such
as Southbank, Docklands and the CBD—more
than 50% of new apartments re-sales since
2011 were selling for less than the original
purchase price.
To some investors, this might indicate that the
market is bottoming out and is therefore ripe
for the picking. To others, it could be a sign that
they should steer clear of Melbourne’s
apartment market for the foreseeable future.
You need to do your own research so you can
come to a conclusion you’re comfortable with,
while also getting to know what your goals are.
Do you want to find a home to move into it? Do
you want to invest in a starter property to
eventually leverage into a bigger house? Or are
you opting to sink your funds into an
investment that delivers a profit from day one?
Once you know exactly what you’re aiming to
achieve, you can start evaluating opportunities
within Melbourne’s property market to see
whether they align with your goals.
Property investment in Melbourne- market
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