Melbourne’s inner suburbs’ oversupply of apartments continues unabated with 15,300 predicted to be completed in Melbourne during the year 2014, according to one of Australia’s leading strategic property consultancy Charter Keck Cramer. Astoundingly this is almost 2000 more than the record 14,200 which was marketed off the plan last year.
This is good news for would be housing investors says Jock Bing of Portfolio Management Services a long-term investor consultancy in the acquisition of inner city property.
He believes the crowded off the plant apartment market in Melbourne is combining with a new investor focus northwards to Brisbane to open up yield opportunities in Melbourne’s favoured inner suburbs for existing property. “There is evidence that buyer demand is tapering in Melbourne while rental vacancy rates for good quality inner housing is growing.
Not everyone wants to live in a high rise, he says and very few houses or low rise existing units in favoured suburbs stay on our books for long”.
Much of the negative press regarding Melbourne property investment is about new or off the plan apartments, he contends, “and this is masking a wider story” The yield figures for existing property both housing and units are quite strong with yields above 4.5% quite possible. When you consider that you are buying around 30% under replacement cost at a time of continuing record low interest rates in a city with a growing population – Melbourne property in the right suburbs should continue to be on the radar he says for any investor with a long term focus.
Sydney also continues to be experiencing an apartment boom, with 7530 apartments due for completion in 2014, albeit this is a considerable reduction of 20 per cent on last year.
The shortage of land in Sydney due to its most attractive feature the harbor, means those apartments offering excellent access to the city and in the highly desirable suburbs of east and west an advantage. This type of property should provide quite sustainable yields in the short term, says Bing.
However he believes the same opportunity regarding existing well-positioned housing still applies in Sydney but cites a softening of vacancy rates as an important consideration when purchasing the ‘right’ property so that such an investment can readily attract tenants.
To discuss the current investment opportunities for existing property with excellent yields please call Rocco de Maio or Jock Bing on 03 96211044 or Contact Us now through this Website for a prompt response.