Vacancy Rates and Median Rents

Melbourne’s inner suburbs experienced higher than usual vacancy of 3.8% in January this year but have since decreased back to a more normal figure of less than 3% for February and March according to the REIV. Conditions in the middle and outer suburbs have shown a similar pattern with vacancy decreasing since January.

As a whole, Melbourne saw a vacancy rate of 2.8% in March. Though this is a decrease from the summer spike of 3.6% in January, it is substantially higher than the July 2012 figure of 1.9%, showing an increase over this financial year.

Metropolitan Melbourne’s median rents overall have increased during this financial year according to the REIV. The median rent for houses increased from $380 per week in July 2012 to $395 per week in March 2013. Units similarly increased in this time period from $360 per week to $370.

The inner suburbs of Melbourne (0-10km from the CBD) saw median rents increase from $521 to $530 for houses and $380 to $395 for units between July 2012 to March 2013.

The middle suburbs (10-20km from CBD) showed a slight increase for house rents (from $390 to $395 per week) and a small decrease for units (from $360 to $350 per week) in this period.

The outer suburbs (20km+ from CBD) also showed an increase for house median rents (from $333 to $340 per week) but units remained stable with a median rent of $300 recorded in July 2012 and March 2013.

Source: The Real Estate Institute of Victoria Ltd (REIV)

HTW Month In Review Mar 2013

“Are rates causing any interest?” is the Theme of this month’s HTW Month in Review

Opinion on the Melbourne residential market here are some highlights:

– In the past 12 months we have seen an unusual event where multiple interest rate reductions do not appear to have spurred on the residential market in the same way they have over previous times.

– Efforts of the RBA to stimulate the home finance sector in 2012 appear to be having a mixed effect on home loan approvals within Victoria while also considering incentives (first home buyer reduction and stamp duty savings) being added and removed during the year.

-The tightening of credit controls by the banks, and the uncertainty around medium to long term job security, are likely to be at the heart of buyer resistance to be enticed by the offer of cheaper money……… for the moment anyway.

– The impact of consumer sentiment / job security is clearly reflected in the decline in approvals for home loans for properties located in the growth corridors of Melbourne and the first home owner markets.

– Job security is a major influence and the subdued property markets can have a strong correlation.

– The growth suburbs (first home owner markets) are among the most sensitive when it comes to changing interest rates due to the uncertainty of rates matched with the fixed incomes of residents in such areas.

– In these markets families are usually borrowing to their maximum capacity and interest rate changes can correlate directly to the families weekly expendable income amounts and impact day to day living standards.

If you don’t already, you can subscribe to receive this report directly each month for FREE. Simply jump on the HTW website www.htw.com.au and follow the prompts.

Thanks to Therese from Alphabroker

HTW Month In Review Nov 2012

“Outer Space ‘Far flung suburbs and their performance’”

·   These buyers are willing to deal with time spent travelling in search of affordable living in Pakenham, Officer, Cranbourne East and Clyde North

·  Many purchasers are trade or manufacturing related who work in the south-east.

·  The area is currently being developed with low density, affordable living in mind.

·  These properties are being purchased mainly by owner-occupiers who are taking advantage of relatively low interest rates along with developer/builder incentives that are on offer.

·  The developers are aiming to reduce holding costs and move stock, so the enticing incentives that are being offered are promoting sales in the region

·  There is a range of choices available for homebuyers as there is currently a multitude of land estates and builders within this outer south eastern area

·  The market in this area is likely to remain static as the impacts from the government’s withdrawal of the first home buyers’ grant is being felt.

·  Developers and builders are offering incentives such as cash rebates upon settlement to stimulate the market but this will take time as buyer confidence is slow in recovering and job security is becoming a concern.

·  As the urban sprawl continues and inner city house prices/affordability continues to rise these areas will quickly develop and median house prices within the area can be expected to rise over the medium to long term.

If you don’t already, you can subscribe to receive this report directly each month for FREE. Simply jump on the HTW website www.htw.com.au and follow the prompts.

Thanks to Therese Oneill from Alphabroker Mentoring

HTW Month In Review Oct 2012

“Brickbats and Bouquets – ‘All that’s Right and Wrong with Our Markets’ ”

Opinion on the Melbourne residential market….

· Areas such as the northern suburbs are experiencing a slide in demand since the expiry of the first home owners grant by the government which was a huge stimulus for growth in the area.

· There is a large supply of estate houses for sale along with developments under construction in Mernda and Craigieburn are experiencing less demand then what was originally planned for.

· In these areas there is little reason to celebrate as property prices have experienced a drop due to the lack of demand for these products ever since the incentives were taken away.

· With special finance options for first home buyers, developers have identified their target market as young couples and families looking for affordable living options.

· The Melbourne housing market has experienced a shift in development focus. For the first time there are more multi-residential developments such as townhouses, units, apartments, flats, etc being built in Melbourne instead of houses.

· Housing affordability is the main reason for this shift as people are pushed to build smaller more modest, cheaper homes.

· The transitioning mentality of the population in relation to buyer preferences is also another reason as people are developing an interest in terrace housing as it looks appealing and is essentially affordable.

· Overall the market outlook in the northern suburbs has changed due to macro influences which have put pressure on house prices and influenced demand for product in these areas.

If you don’t already, you can subscribe to receive this report directly each month for FREE. Simply jump on the HTW website www.htw.com.au and follow the prompts.

Thanks to Therese O’neill from Alphabroker for this summary

HTW Month In Review Sept 2012

“What Can I Buy for just $300,000?

Opinion on the Melbourne residential market here are some highlights:

· The patch we have chosen stretches from as close to the city as Preston out to as far north as Craigieburn offers primarily 1- and 2- bedroom apartments and blocks of vacant land that can be afforded for $300,000.

· In Preston the range is very restricted with single bedroom units primarily being all that can be purchased. If you do purchase a 2- bedroom apartment it will be in a poor location or in extremely poor condition.

· In the new estates in northern suburbs closer to Wollert, and where  apartments are scarce and little infrastructure has been developed, it is still extremely hard to find any liveable homes for under $300,000

· To enter into the market in the northern suburbs around Craigieburn and Wollert, a family requiring a 3- bedroom home can be expected to pay around $350,000

· Closer  into the city around Pascoe Vale prices will start from $360,000 to $370,000 range. The houses for this price are very basic and will often be in the poorer locations of the suburbs.

· At the moment, with house prices experiencing decreases in the past year, we are now seeing them stabilising.

· It is expected that in the coming year house prices will bounce back with growth expected.

· Prospects in the inner suburbs such as Preston and Coburg are enticing as rental returns are still competitive. 1- bedroom apartments that are selling for under $300,000 are still demanding rental returns above $1,200 p/m

· Investing in the outer suburbs throws up more uncertainty as the perception that these undeveloped suburbs creates risk and doubt leads to them experiencing slower growth patterns.

· Once these suburbs are established in terms of infrastructure  and the anticipated planning comes to fruition the growth will then be seen

If you don’t already, you can subscribe to receive this report directly each month for FREE. Simply jump on the HTW website www.htw.com.au and follow the prompts.

Summary courtesy of Therese O’Neill from Alphabroker