2023-10-23-莱坊-Melbourne_New_Apartments_Insight_Q3_2023_8页_1mb

Melbourne New Apartments Insight Summary

Core Content Overview

This document provides a quarterly analysis of the high-density residential market and new apartment market in Greater Melbourne by Knight Frank Research, focusing on site sales, price performance, and developer activity for the build-to-sell (BTS) product in Q3 2023.

Main Points

New Apartment Price Growth

• New apartment prices in Greater Melbourne have outpaced the established stock, with prices rising 3.0% annually and 1.0% in the June 2023 quarter.
• The average price for new apartments in June 2023 ranged from $7,000/sqm to $17,000/sqm, with an indicative rate of $10,300/sqm.
• Prices are forecasted to increase by 4% in 2023, 2% in 2024, and 2% in 2025.

Developer Activity

• The volume share of residential development sites purchased for high-density development in Greater Melbourne reached 82% in the year to June 2023, up from 42.9% five years earlier.
• Building approvals for apartments decreased by 22% from June 2022 to June 2023, with 19,049 apartments approved.
• Developer appetite remains significantly lower than the 34,779 apartments approved five years ago.

Cost of Construction

• The cost of construction in Greater Melbourne increased by 5.5% in the year to June 2023.
• Standard finish new apartments cost $2,795/sqm to $3,345/sqm (plus GST), while prestige finish apartments cost $4,065/sqm to $4,770/sqm.

Established Apartment Performance

• Sales volume for established apartments dropped by 1.7% in the June 2023 quarter, with 5,192 apartments sold.
• Annual sales volume was 21.4% lower than the previous year.
• The average days on market for an apartment increased to 91 days in the June 2023 quarter.
• Median capital values for established apartments fell by 5.5% over the year to June 2023, but rose to $553,000 in the last quarter.

Rental Market

• Gross rental yields for apartments increased to 5.19% in the June 2023 quarter, up by 26 bps.
• Rents increased by 4.2% in the June 2023 quarter and 22.0% over the past year, with median rents at $500 per week.
• Total residential rental vacancy in Greater Melbourne was 2.1% at the end of June 2023, with varying rates across regions:
  • CBD & Inner (0-10km): 2.0%
  • Middle (10-20km): 2.9%
  • Outer (20km+): 1.6%

Key Statistics

Regional Analysis

Prime Regions

• Developer demand for high-density sites in prime regions has declined, but new apartment prices continue to rise due to limited supply.
• Annual change in site sales volume: -46%
• Annual change in site prices: -9.6%
• Annual price change for new apartments: 3.3%

Inner Suburbs

• A significant reduction in new apartment supply has driven prices up.
• Annual change in site sales volume: -31%
• Annual change in site prices: -6.8%
• Annual price change for new apartments: 3.0%

Middle Suburbs

• Sales volume for high-density sites increased by 48% in the year to June 2023.
• Site prices fell by 14.8% over the past year.
• Annual price change for new apartments: 4.9%

Outer Suburbs

• The outer suburbs remain primarily a standalone house and townhouse market.
• No major high-density residential sites were sold in the year to June 2023.
• Annual change in site prices: -5.9%
• Annual price change for new apartments: 6.7%

Forecast Highlights

• New apartments in Greater Melbourne are forecasted to be two-thirds of the annual average delivered over the past five years by the end of 2025.
• New apartment prices are expected to rise by 4% in 2023, 2% in 2024, and 2% in 2025.
• The official cash rate target is 4.10% in September 2023, with a forecast of 3.40% by 2025.
• Victoria’s annual economic growth was 7.4% in 2022, with a forecast of 3.6% in 2025.

International Buyers

• International buyers accounted for 7.4% of new property sales in Victoria in June 2023.

Summary of Trends

• New apartment prices are rising, driven by limited supply and increased demand.
• Developer activity is declining, with reduced approvals and lower appetite for high-density sites.
• Site values have decreased across all regions, with the most significant declines in prime and middle suburbs.
• Rental market is stable, with increased yields and median rents, but still low vacancy rates.
• Outer suburbs remain a market for standalone housing, with minimal high-density development.

Additional Notes

• All figures are in Australian Dollars (AUD) unless otherwise stated.
• The prime regions include specific postcodes in Inner Melbourne, Inner East, Bayside, and Eastern Suburbs.
• The document includes several charts and graphs to illustrate the trends in site sales and price performance across different regions.