APARTMENTS in recently completed projects have resold below their original contract price.
The Australian Property Institute and Real Estate Institute of Victoria’s 2018 State of the Market was launched by newly appointed API CEO Amelia Hodge, who introduced the speakers.
Presenting at the event, JLL’s residential research national director Leigh Warner said in 2017, apartments that resold within three years of a project completion recorded a median decline of 5.7% across inner Melbourne. In 2016, the median loss was 3.1%.
Resales in Melbourne CBD recorded an average loss of 6.7% in 2017 and outside of the city, it was 2.3%.
By value, apartments up to $1 million were the worst performers. This is also the price range for one bedroom units, where the average resale loss was 6.9%.
In comparison, two bedroom unit resales were down 3.2% whilst three bedrooms only recorded a small 0.2% decline.
Meanwhile tighter lending requirements and slower pre-sales has seen the supply of future of apartments push out.
Warner said supply peaked in 2017 and will fall sharply in 2018.
Between 2018-2020, 14,200 units are construction in Melbourne and whilst a significant number of projects have planning approval for 2021, it is not certain they would proceed.
From 2022, only a small number of projects are in marketing phase with no supply mooted.
Furthermore, Warner said the impact of the new foreign buyer taxes levied by federal and state governments has yet to be realised.
According to JLL, as at January 2019, Victoria will charge foreign buyers the highest taxes in the country, $92,750 for a $750,000 property, followed by New South Wales with $89,240, Queensland with $79,275, Western Australia with $62,540 and South Australia with $87,500.
Australian Property Journal