City Beat November 2024: Melbourne off the plan market gets shot in the arm, but overall market downturn
Melbourne's property market continues to trickle toward the bottom.
CoreLogic's Monthly Index showed both the house and unit market contracted in October. It was another month units (-0.1 per cent) outperformed houses (-0.2 per cent), but it was the first month since August that both dwelling groups were in the red.
The median value of a unit in Melbourne is now $613,000.
The decline in the property market in Melbourne is predominantly being driven by higher supply.
“Total listings are now 13.2 per cent above the previous five-year average in Sydney and 13 per cent higher in Melbourne,” CoreLogic Research Director Tim Lawless noted, helping to explain the weaker conditions in these markets as buyers benefit from more choice and less urgency in their decision making.
That's not the case in the off the plan market however, which is facing critically low supply.
While the property market in general in Melbourne continues to trickle toward bottoming out, the off the plan market might just be primed to see growth.
What happened in the Melbourne off the plan apartment market in October?
October may present the turning of the tide in the off the plan apartment market in Melbourne.
In the last week of the month, the Allan Government announced two new policies to stimulate new development across the city.
The first was the announcement that they were encouraging new apartment development around 50 train and tram stations.
The second announcement, days later, was to abolish stamp duty for all buyer types across all price points for 12 months.
The news came in the last week of October, and since then three new developments have hit the market, one of them being Bright, just six two, three and four-bedroom apartments in the heart of Brighton.
Marshall White Projects has calculated buyers could save up to around $200,000 in stamp duty on the apartments since the Government policy kicked in.
Marshall White Projects Director Leonard Teplin said the satmp duty abolition is a "game-changer for downsizers."
"They [downsizers] can now purchase high-end apartments or townhouses without the hefty stamp duty, making the transition more financially appealing," Teplin says.
"I expect to see a surge in downsizer activity, especially in premium inner-city and Bayside locations. This also has a dual benefit of encouraging downsizers to transition from the family home, and therefore, making more established housing available for family buyers."
Given the 12-month timeline on the stamp duty abolition, the expectation is that developments recently approved, or those that were paused and waiting for some sort of stimulus to improve the market conditions, will now launch.
Time & Place will no doubt be looking to get their Glen Iris mixed-use development into market sooner rather than later.
Their joint venture with Woolworths for a 60-unit project above a full-line Woolworths was approved late last month.
The five-level building, designed by Cera Stribley at 173 Burke Road, is aimed at targeted at downsizers and young and multi-generational families.
Sales are also set to launch at Gurner's $1.7 billion Docklands precinct, Elysium Fields.
The first three towersm, that will house around 700 dwellings, have been designed as a futuristic wellness and anti-ageing utopia. The 27,000 sqm site at 208-226 Harbour Esplanade will house around 1,100 dwellings upon completion and will include around 3,700 sqm of immersive public landscapes and gardens.
Hamilton Marino has been appointed to build the first tower. Early construction works are expected to commence in the next four weeks, prior to the public launch of sales, which is earmarked for early next year.
Read more: Sales to launch at GURNER's $1.7 billion Elysium Fields precinct in Docklands
SMA Projects timed their launch back into the Melbourne off the plan apartment market perfectly.
They recently unveiled The Regent Fitzroy, a building that has been designed purposefully to reimagnie the former iconic Regent Theatre that once sat on the Fitzroy Street site.
The Regent will comprise 64 one, two, and three-bedroom apartments starting from $725,000.
Read more: SMA bring back The Regent Theatre heritage in Fitzroy with latest apartment development
Sunkin Property Group also revealed the latest stage of its Net Zero Highett community, Highett Common.
The Mews Collection, the third stage of the 11-hectare masterplan, will comprise a trio of buildings with 185 apartments.
The apartments will feature floor-to-ceiling glazed windows, to take advantage of the views of the surrounding parklands, as well as all-electric kitchens with stone surfaces, Bosch appliances, and induction cooktops.
The Mews Collection represents the first opportunity to buy at the luxury end of the market in the development.
The 12 apartments, dubbed the Luxury Collection are a step up in design, with Gaggenau appliances, herringbone timber flooring, marble benchtops, and advanced home automation systems that are integrated with the Highett Common Connect app.
Read more: Sunkin reveal The Mews Collection, Highett Common's latest release
Read more: City Beat September 2024: Melbourne property market hovering around the bottom
Read more: City Beat August 2024: Is Melbourne approaching the bottom of the market?
