New-Apartment Rise

Market Insights
9 years ago
1 minutes

New apartment sales across the country have risen in comparison to January.

Melbourne has been home to the apartment boom, and it is apparent that it is still going.

Despite lower interest rates being implemented, as well as a lower and stable cash rate, high land costs, planning changes (in both function and in parliament) as well as higher taxation, has sent warning signs to certain areas - yet it seems the off-the-plan apartment industry has been impervious to the challenges.

As recorded by Housing Industry Association, new dwelling sales over the past month rose up by 11.1% - a considerable rise since January. Private housing sales recorded a 1.3% drop for the same time period. 

The private sales of multi-units rose to 1643 this month, up from 1471 in January. Melbourne's control of the market, coupled with the growing industries of Sydney and Brisbane, has made this sustainability and consistent growth possible.

As quoted by IBISworld's property report, "unprecedented investment into apartment construction has supported a widening of profit margins, which is particularly lucrative for large-scale inner-city developments". 

The likes of large-scale CBD apartment developments such as UEM Sunrise's Aurora Melbourne and Far East Consortium's The Fifth have received incredible interest from both local and international buyers.

This boom is now set to start in Sydney as well, with Sydney property prices expected to rise by 20% over the next 2 years according to BIS Shrapnel. However it is believed that the growth of investment in NSW and QLD will only "marginally outweigh the winding back of investment in Melbourne".

A moderate upswing is predicted to occur in the 2017/18 year, with improved housing affordability and a decline in home loan interest rates. This boom is expected to then continue on to at least 2019/20, assuming that the trends of today correspond with a regular pattern of housing investment.