Interpac Business and Migration Solutions Melbourne Australia

(November 3, 2011)

APPROVALS of new apartments in Melbourne is easily outstripping the other capital cities and has reached a record share of the national market, according to Oliver Hume research. Prices are also higher and apartment blocks have more units.

In 2010-11, half of all metropolitan Melbourne dwelling approvals were multi-units - up from 39 per cent in 2009-10 and nearly double the 26 per cent in 2005-06.

Oliver Hume's national general manager of research, Andrew Perkins, said that since the late 1990s multi-unit approvals as a percentage of Melbourne's total approvals had averaged just over 34 per cent.

Melbourne's unit experience contrasts with the performance of housing nationally. Photo: Luis Enrique Ascui

In 2010-11, multi-unit approvals fell just short of 23,800, rising from 16,400 last year and about 6600 in 2005-06. ''Moreover, the 23,800 multi-unit approvals in Melbourne equals 44 per cent of national multi-unit approvals - the highest on record,'' he said.

However, national multi-unit activity fell 11 per cent in the March quarter to be 5 per cent lower than a year ago.

Melbourne's unit experience contrasts with the performance of housing nationally, where work done on new housing fell by 5 per cent in the June quarter and 10 per cent below the level a year earlier. Victoria's new housing activity was up 1 per cent.

Despite Melbourne's record performance, the number of projects was below 300 for the second successive quarter, a 4 per cent decline from the previous quarter and the lowest number since the 2010 June quarter.

''If fully developed - and the majority will be - the 284 projects will deliver about 41,400 apartments over the coming years,'' Mr Perkins said. Of these, just under 23,000 were in buildings already under construction or completed.

Oliver Hume found the average number of apartments per project was now 157, up 10 per cent from 143 in the previous quarter and from 123 at the same time last year.

The median one and two-bedroom entry price for apartments was $369,000 and $520,000 respectively. The price differential between the two rose further to $151,000, up from $115,000 when records began in 2008.

Since then, the entry level of a one-bedroom apartment in Melbourne had risen by 3.3 per cent a year, from $335,000 to $369,000. For two bedrooms, the rate was 5 per cent, from $450,000 to $520,000.

Source from Theage.com.au