The Urban Developer
AdvertiseEventsWebinars
Urbanity
Awards
Sign In
Membership
Latest
Menu
Location
Sector
Category
Content
Type
Newsletters
Untitled design (8)
FULL PROGRAM RELEASED FOR URBANITY-25 CONNECTING PROPERTY LEADERS ACROSS THE ASIA PACIFIC
FULL PROGRAM RELEASED FOR URBANITY-25 WHERE THE PROPERTY INDUSTRY CONNECTS
VIEW FULL AGENDADETAILS
TheUrbanDeveloper
Follow
About
About Us
Membership
Awards
Events
Webinars
Listings
Resources
Terms & Conditions
Commenting Policy
Privacy Policy
Republishing Guidelines
Editorial Charter
Complaints Handling Policy
Contact
General Enquiries
Advertise
Contribution Enquiry
Project Submission
Membership Enquiry
Newsletter
Stay up to date and with the latest news, projects, deals and features.
Subscribe
ADVERTISEMENT
SHARE
10
print
Print
ResidentialAna NarvaezWed 30 Oct 19

Melbourne’s Inner City Pipeline Slumps to Six Year Low

b5273a6d-7fc5-4168-b092-5ea78f3818c9

Despite a rebound in Melbourne house prices over the September quarter, its inner-city apartment supply is projected to fall to the lowest levels in six years with 4,000 apartments projected to hit the market in 2019.

Along with a return to boom-like house price growth of 4.1 per cent over the 2019 third quarter, inner-Melbourne apartment rents have reached record highs with vacancies falling below the 2 per cent mark.

But tighter lending conditions for developers and investors and a soft pre-sales environment has constrained development activity, according to valuation firm Urban Property Australia.

“With development lending from the major banks constrained, a number of projects previously being actively marketed have been withdrawn,” Urban Property managing director Sam Tamblyn said.

Tamblyn cites Charter Hall’s 555 Collins Street—originally slated for a 625-unit apartment tower—Golden Age’s 85 Spring Street and 383 La Trobe Street, which Mirvac swiftly switched to an office scheme after purchasing the site late last year—as major projects withdrawn from the market.

Urban Property analysis reveals that at least 3,000 apartments across a number of projects have been shelved.

Related: New Home Sales Back at Mid-2018 Levels

▲ Sterling Global’s shelved residential scheme at 383 La Trobe Street. Image: Ateliers Jean Nouvel.


For those that can get their hands on funding, the outlook for development does look slightly rosier with Reserve Bank deputy governor Guy Debelle predicting a shortfall in supply in the near future.

“While the increase in supply has finally met the earlier increase in demand, demand will continue to grow given population growth but supply is going to decline. So there is quite likely to be a shortfall again in the foreseeable future,” Debelle said at a conference in mid-October.

Urban Property forecasts that to meet the projected population growth of 181,325 by 2031 within the City of Melbourne, a further 40,400 dwellings will need to be delivered.

Tamblyn forecasts that the inner-city Melbourne supply pipeline has peaked in the short term.

“Although supply levels in 2020 through to 2022 are expected to be above average; from 2023, completions are projected to significantly decline.”

With the rental vacancy rate below national metropolitan averages of 2.1 per cent, Tamblyn expects apartment rents to grow by 4 per cent over the year to reach an all-time high of $530 per week.

“Rent will continue to increase in the inner-city precinct along with the broader metropolitan area supported by strong interstate and international migration and a declining pipeline of new apartments,” Tamblyn said.

ResidentialAustraliaMelbourneFinanceReal EstatePlanningPlanningSector
AUTHOR
Ana Narvaez
The Urban Developer - Editorial Director
More articles by this author
ADVERTISEMENT
TOP STORIES
Exclusive

Accor Deputy Delivers Verdict on Brisbane Games Hotel Shortfall

Phil Bartsch
6 Min
Qld Budget 2025-26 Brisbane City
Exclusive

Billions Promised, Now Deliver: Industry’s Qld Budget Verdict

Vanessa Croll
6 Min
Medium Density housing in NSW
Exclusive

NSW Budget ‘Groundbreaking’ $1bn Guarantee to Unlock Housing

Leon Della Bosca
7 Min
Exclusive

Azure’s Trent Keirnan on Playing the Long Game

Taryn Paris
5 Min
Exclusive

Private Credit Surge, Skittish Buyers Force Banks to Loosen Presale Rules

Taryn Paris
5 Min
View All >
Builder Hansen Yuncken has completed construction of ISPT and HESTA's latest addition to the St Vincent's Hospital Melbourne Precinct.
Life Sciences

ISPT, HESTA $140m Fitzroy Life Science Tower Tops Out

Marisa Wikramanayake
Ledlin Developments Somerville Business Park
Industrial

Ledlin Plots $13m Somerville Premium Business Park

Leon Della Bosca
Not-for-profit BaptistCare is about to embark on one of its biggest projects to date, a 6.4ha development in Sydney’s north west with a capital investment value exceeding $2 billion.
Placemaking

BaptistCare Plans $2bn Precinct at Macquarie Park

Renee McKeown
Proposed for a site held since 1962, the not-for-profit’s plans include a school, apartments and updated seniors village…
LATEST
Builder Hansen Yuncken has completed construction of ISPT and HESTA's latest addition to the St Vincent's Hospital Melbourne Precinct.
Life Sciences

ISPT, HESTA $140m Fitzroy Life Science Tower Tops Out

Marisa Wikramanayake
2 Min
Ledlin Developments Somerville Business Park
Industrial

Ledlin Plots $13m Somerville Premium Business Park

Leon Della Bosca
3 Min
Not-for-profit BaptistCare is about to embark on one of its biggest projects to date, a 6.4ha development in Sydney’s north west with a capital investment value exceeding $2 billion.
Placemaking

BaptistCare Plans $2bn Precinct at Macquarie Park

Renee McKeown
2 Min
King William Road City of Unley Corner of Mary Street and King William Road North
Planning

Rezoning Push to Unlock $300m Scheme at SA’s Unley

Leon Della Bosca
4 Min
View All >
ADVERTISEMENT
Article originally posted at: https://theurbandeveloper.com/articles/melbourne-apartment-supply