Oliver Hume

In Victoria, multi-unit activity should remain relatively strong for the balance of the financial year, albeit falling from its peak last year when some 24,400 dwellings were approved.

At its peak, multi-unit activity made up 41 per cent of all Victoria dwelling approvals: up from 31 per cent in 2009/10, and 23 per cent in 2005/06.

Of the 40,100 apartments across metropolitan Melbourne, around 22,000 are in buildings already under construction or completed.

The impact of slowing population growth, falling consumer confidence, a soft established housing market, rising retail land supply and, perhaps most importantly, potential purchasers’ ability to secure finance, all appear to be mounting.

Prices have now dropped by almost $16,000 from their peak of $225,750 in the December quarter 2010: a fall of 7.5 per cent over the 15 months.  If incentives are included, the net effective land price is now $200,000.

Despite some green shoots, for the fourth consecutive quarter, land prices in Melbourne’s growth areas declined: by $3,000 or around 1.4 percent to $215,000.

Prices have now fallen by more than $10,000 from their peak of $225,750 some 12 months ago. In percentage terms this equates to a fall of 4.8 percent.

The Brisbane market has experienced significant upheaval since the Global Financial Crisis made its mark on residential real estate in 2008.

What followed was a very difficult transitional period for real estate practitioners and those with a vested interest in property, as Brisbane recorded its lowest volume of sales and confidence since prior to the early nineties.

Land prices in Melbourne’s growth areas fell in the September quarter: by $2,000 to $218,000.

Although the decline was small - less than 1 per cent - it was the third successive quarter in which prices eased.

In the September quarter, projects in Mitchell (Beveridge-Wallan) were for the first time included in the growth area (and will be included in all future editions of this publication).

At a national level, work done on new housing fell by 5 per cent in the June quarter of 2011 and was 10 per cent less than a year earlier. 

The big fall was in multi-unit activity, which dropped 12 per cent from a strong previous quarter to be 5 per cent lower than a year ago.  Work on new houses declined by 2 per cent and was 12 per cent less than a year ago.

For the second consecutive quarter, land prices in the growth area have fallen.  Only marginally though: the median price was down by just 2.5 per cent to $220,000.

The recent cycle has been strong: not since the index commenced in 2006 have prices previously fallen in two consecutive quarters.  At that time the median price was $136,000, the official cash rate of 5.5 per cent was above its current rate, and Victoria’s population, growing at around 21,000 a quarter, was yet to boom.

Now in its eighth year, the 'Bi-Annual Purchaser Profile and Sentiment Survey' provides Oliver Hume Real Estate Group with a unique marketing tool, which enables it to undertake real-time buyer profiling by market segment on a growth corridor, local government area or suburb level: superseding Australian Bureau of Statistics Census data to some extent.