The current Melbourne residential market is being driven by a number of key factors including lower consumer confidence, a slowing state economy and an increase in supply. The underlying supply deficiency of dwellings which has led to very low vacancy rates is being rapidly run down with record levels of new dwelling construction. This is reducing pressure on prices and vacancy rates.
Levels of buyer activity in terms of sales volumes increased over 2011, despite the pressure on capital values, illustrating healthy demand levels. Rents continue to rise and as the cost of home repayments starts to align more closely with rent payments, current tenants are also likely to look at making the leap into home ownership.
Going forward, it is expected that there will be a continued easing on vacancy rates and stabilisation of capital values given the slowing in Victoria’s population growth and high volume of new supply currently under construction. Forecasts of improving economic conditions and further employment and income growth will underpin the prospects for a stable Melbourne housing market.
Property Valuer Melbourne - Office
The Melbourne CBD office market has the second lowest vacancy rate amongst mainland capital cities and has recently enjoyed moderate growth in rents and capital values. The market is currently considered balanced that is demand driven, rather than supply led.
Offshore demand for Melbourne CBD office investments appears to be strengthening, highlighting the market’s resilience and appeal as a global investment destination.
In a period of global economic uncertainty, the outlook for the Melbourne CBD office market remains positive. Continued stability and anticipated rental growth is likely to continue to be a key attraction for offshore investors. Limited forecast growth in white collar employment over the next 12 months, together with a lack of new supply in the first half of 2012 is likely to keep vacancies at similar levels before new stock and backfill supply comes online.
Valuations Melbourne - Retail
Melbourne’s CBD retail market remained resilient leading into 2012, a lack of supply and underlying demand from international and food based retailers has contributed to low floor space vacancies and rental growth across the core.
Concerns regarding the European debt crisis have been attributed to weakened consumer demand in 2011 as consumers adopt a more conservative approach towards discretionary spending. A steady pick up in retail turnover growth is forecast for 2012.
The outlook for Melbourne CBD retail remains positive, underpinned by continued population growth and a sound domestic economy. The construction pipeline for retail projects is anticipated to remain low over 2012, as the vast majority of new and expanding retail developments are not expected to come online until 2013.
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