The Age
PHILIP HOPKINS
June 30, 2010
THE number of apartments in Melbourne will expand by about two-thirds to 77,000 if all planned projects go ahead, according to research by Savills Australia.
In the interim, the apartment stock will increase by at least 15 per cent if projects now under way are completed, says Savills’ latest Melbourne Inner City Residential Market Spotlight.
The report puts the total apartments at 47,418 in the following areas: the central business district, St Kilda Road, Southbank, North West Fringe, Eastern Fringe and Bayside (Port Melbourne, St Kilda and Middle Park).
A further 30,073 are either planned or being built, including 6113 dwellings in the Docklands precinct. Report author – Savills’ associate director of research, Claire Cupitt – said this would push the apartment stock to more than 77,000, or nearly 65 per cent more than now.
Ms Cupitt said this development was being driven by population growth, pent-up demand due to limited development during the global financial crisis credit squeeze, affordability, the rising popularity of apartment living, and the state government’s push for higher-density living.
”Should all of these planned apartments go ahead it would amount to an extraordinary leap in apartment accommodation on top of what is already a significant rise in projects currently under way,” she said.
Ms Cupitt said high stand-alone house prices had also appeared to influence investors’ and owner-occupiers’ preference for apartments.
Over the next three years, Victoria’s population was forecast to grow by 292,000, from 5.5 million now, or an annual average of 1.7 per cent, a trend that would underpin apartment construction.
Ms Cupitt said Victoria was attracting interstate migration because housing was so expensive in other capital cities.
”Put all of these factors together, along with rising investment yields and depreciation allowances, and it would appear that demand for apartments will continue to exceed supply for some considerable time yet,” she said.
According to the REIV, Melbourne’s median unit price jumped by 25 per cent to $450,000 in March this year, from $360,000 a year ago. This reflected stronger demand and a general shortage in housing stock, Ms Cupitt said.
