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.
Investing in property is not an easy decision. A lot of consideration and research is required, and often plagued by fear of the unknown. However, now, more than ever, is the perfect time to invest in Melbourne’s commercial property market, with recent reports predicting a strong growth in demand for CBD office space. In recent years, investors have had a strong focus on the residential apartment market but with an ever-increasing influx of apartments and warnings of oversupply, we are now seeing a move towards commercial properties. Unlike the residential market, commercial properties across Melbourne are in high demand, due to strong rental growth and rising employment opportunities - particularly in the CBD. According to the latest Commercial Property Update by Deutsche Bank, Victoria’s economy is outperforming any other Australian state – the result of strong demand, employment opportunities and population growth. The bank predicts that commercial property incentives will fall to historic averages of 20-25% in 2018, driven by low vacancy rates and high demand. This prediction is supported by other research, including a recent report by University of Queensland geographer, Thomas Sigler, highlighting a rise in corporate CBD headquarters between 2013 and 2016. Melbourne outshone other capital cities as a corporate location and was the only city to gain additional corporate HQ’s, driven by the information technology and healthcare sectors. This rise in corporate headquarters, and the ease of access to the city from the outer suburbs thanks to Melbourne’s transport systems, has seen continued growth in white collar workers in Melbourne’s CBD and inner suburbs, which has in turn increased the demand for office supply. With rent demand for CBD offices at an all-time high, it is now the perfect time to consider your commercial property options within Melbourne’s inner city. Unsure what to keep an eye out for? Below, we take a look at the latest commercial trends and share our top tips to choosing a commercial investment heading into 2018: Focus on food Across the board, we are seeing growing demand from potential tenants on the proximity to food retailers. New developments are including space for food and beverage retailers within commercial office buildings right from the get go, with nearby food-andbeverage offerings influencing tenants’ decisions to purchase or lease. Take this into consideration when choosing your property location and ask yourself if these services will be available to increase tenant attraction. Consider a strata office This month, advisory firm Charter Keck Cramer released insights into the value of strata offices across Melbourne’s CBD, explaining that demand for these spaces has significantly increased in recent years. Strata offices - subdivided floors or buildings that offer individual ownership or leases for companies - are ideal for smaller businesses or single operators, and comprise of less than six per cent of Melbourne’s total CBD office floor space.