City Beat August 2024: Is Melbourne approaching the bottom of the market?

Melbourne's stalling property market has to be nearing the bottom.

Recent data published in the Australian Financial Review from property data analytics firm CoreLogic showed the Melbourne median dwelling value is currently 33.1 per cent below the median dwelling value in Sydney. Historically, on average, that gap has been 19.7 per cent.

It's the same story with Brisbane, where values in the Queensland capital are 8.8 per cent higher than in Melbourne. Melbourne is usually 13.7 per cent above.

Considering the widened gap that bucks history, as well as the record low new housing approvals in Victoria, rising construction costs, and the expected surge in population due to migration, it's clear that Melbourne is poised for a prolonged period of growth.

The market won't turn around overnight, and the most recent data from CoreLogic shows a decline of -0.2 per cent in the unit market (apartments and townhouses) over July.

Those declines in the established market have likely come because of increased supply levels, CoreLogic's Research Director Tim Lawless notes, where supply is outstripping current demand.

That's not the case in the new apartment market however. The most recent building approvals data from the ABS showed Melbourne's 3,840 unit approvals in June were -14 per cent down from the month prior.

Over two million new dwellings are proposed to be built by 2051 across Metro Melbourne, almost double the number of existing dwellings currently in the metro area.

What happened in Melbourne’s off the plan apartment market in July

Referring back to the lack of supply in the new apartment market, there was only one notable project that moved into a registrations of interest phase.

That's the new Elsternwick development by the design-driven developer Milieu, who revealed what is arguably one of its most unique developmens it has produced since being founded 15 years ago.

Milieu has spent the last two years working alongside Woods Bagot, OCULUS Broached Commissions and March Studio to create a garden-centric community they’re calling Elsternwick Gardens by Milieu.

The multi-building development, on the site of the former ABC Studios bordering Elsternwick's landmark Ripponlea Estate and gardens, has been designed to focus on nature and landscaping.

Residents will have direct private access to the heritage-listed gardens of the Ripponlea Estate, while its head gardener will tend to the landscaping of Elsternwick Gardens by Milieu on its completion.

There was increased sentiment in the market in Glen Iris where Projects by Buxton Director Heath Thompson sold four apartments in the last few weeks at GALERIE which will no doubt encourage the market heading into the spring selling season.

Thompson said three of the four buyers went from enquiry to sale within a week.

"We [Melbourne] haven't had that sort of conversion timeline for what feels like a very long time," Thompson said.

GALERIE has sold predominantly to downsizers, but the recent purchasers presented a different demographic in the building that is expected to welcome buyers toward the end of the year.

Construction got underway at Abadeen's Maléa apartments in Malvern East.

Brompton Construction, the multi-award winning Master Builders Victoria construction firm, has officially commenced construction on the seven luxury apartments on Central Park.

“Abadeen chose Maléa because of its incredible location opposite Central Park in the beating heart of Malvern East," Andrew Leoncelli, who runs Abadeen in Victoria, says.

Brompton Construction is expecting to complete the building in late 2025.

One of Melbourne's most notable developers, Piccolo, filed for its next development as it approaches sellout of its Fitzroy apartment development, A Piccolo House - Gore Street.

This one is in Kew where Piccolo has filed plans for five three-level buildings at 18 Barry Street.

The project, currently referenced as A Piccolo House, Barry Street, part of the Piccolo House collection that targets the high-end owner-occupier, will comprise 60 two, three and four-bedroom apartments.

Read more: First look exclusive: Piccolo plot new Kew apartment development 

Boutique developer Callex Group is also heading to Kew for its latest venture.

Callex is plotting a small development of just seven apartments on an already cleared 1,266 sqm site at 9 O’Shaughnessy Street, walking distance to Kew Junction, Glenferrie Road shopping precinct and Victoria Gardens.

The proposed development includes one two-bedroom apartment and six three-bedroom apartments, along with 15 car spaces and six bicycle spaces.

The design by Carr incorporates elements from the existing built environment, using textures and tones that complement O'Shaughnessy Street and the adjacent Foley Reserve.

Read more: First look: Callex Group plan boutique Kew apartment development