City Beat September 2024: Melbourne property market hovering around the bottom
The property market in Melbourne continues to face downward pressure, now falling behind the likes of Adelaide and Perth for median dwelling value.
Melbourne unit values declined a modest -0.1 per cent over August, while houses dropped -0.2 per cent.
On the face of it, they aren't huge declines. The issue is the pace that other capital cities are growing at. Brisbane is closer to two per cent growth in units, and arguably doesn't have as much of a supply issue as Melbourne.
Questions are being asked as to whether Melbourne now represents a great opportunity for buyers, because the market will turn at some point in the not too distant future, it's more a matter of when than if it will turn.
It's the first time since 2015 the Melbourne median dwelling value has slipped behind Perth, when the latter was just coming off the highs of an iron ore boom.
CoreLogic's 40-year median dwelling value series hasn't seen Adelaide with a higher median than Melbourne.
Values are skewed however slightly, given a third of Melbourne homes are units, compared to around 16 per cent homes in Perth and Adelaide.
CoreLogic Research Director, Eliza Owen, said there are a wide range of factors contributing to Melbourne's softer market conditions.
"The increased tax burden on investment property owners in Victoria, but it's not the only factor at play," Owen said.
"Supply is also a big factor for Victoria, where the state saw more dwelling completions over the past decade than any other state of territory."
What happened in Melbourne’s off the plan apartment market in August?
August was a quiet month in Melbourne's off the plan apartment market, with no new developments of note for buyers to enquire on.
Plenty of developers however are starting to line up their pipeline for the start of 2025.
One of the most exciting projects coming up is the $1.2 billion mixed-use precinct by Salvo for Melbourne's Pentridge Prison in Coburg.
The Melbourne developer is the latest to reveal plans for the southern portion of the former prison that ceased operations in 1997.
The proposed development will include heritage preservation elements, such as Ned Kelly’s grave site and the bluestone F Division building, providing a mix of retail and public spaces while reflecting Coburg’s character.
Pentridge Coburg is part of Salvo’s $3 billion development pipeline, which includes a $1 billion four-tower, mixed-use development at Fisherman’s Bend and Moray House, a $220 million multi-residential development in Southbank.
There were also noteworthy submissions in some of Melbourne's most popular inner-city suburbs.
Diversified developer Goldfields is pushing forward with plans for a 12-level mixed-use project in Richmond that will see 125 apartments developed above ground-floor retail at 9-15 Brighton Street.
With Cera Stribley overseeing design and Jack Merlo handling landscaping, the project is set to bring another high-quality residential offering to Richmond, a suburb known for its proximity to the CBD and iconic attractions like Chapel Street and the Melbourne Sports Precinct.
Well-known construction firm Cobild is also planning an inner-city development. Their plans are in Fitzroy where they're proposing a 10-level building at 159-167 Johnston Street.
Dubbed Johnston & Napier, the development will deliver 57 large-scale apartments, on average spanning over 130 sqm.
With a strong focus on sustainability, this project aims to accelerate Melbourne's transition towards becoming a self-sufficient city, a trend that continues to gain momentum across the city's new developments.
There were several strong sales results in August.
Along the coast in Hampton, design-led developer Wickton sold out its six-apartment project, 58 Beach.
Designed to cater to downsizers, the development, with unobstructed views of the beach and a prime location near Hampton Station, has been particularly appealing to those transitioning from larger family homes.
In Melbourne's south-east, Damgar Property Group’s Rosella apartment project in Murrumbeena continues to perform well, with over half of the 70 apartments already sold.
Situated across from Hughesdale Station and Village, the Rosella development provides a rare opportunity to buy new in this tightly held suburb, where only 100 new apartments were delivered between the 2016 and 2021 census.
For a limited time, Damgar is accepting five per cent deposits on a handful of the one and two-bedroom apartments on offer in the Cera Stribley-designed building.
