hard to catch a falling knife but this will be one to watch over the next 3 years. People are starting to puke it up, with supply projected to be in excess of demand for another 2 years by a large margin. As appartments are an imperfect substitute for houses/terraces this will have a continuing knockdown effect for inner city melbourne properties. Do any locals know what the effect of docklands has been on kensington/flemington (ie where is the ripple up to ?)
It probably has some way to run but could be the property investment of the decade (in australia) when the time is right. Interesting to compare it to sydney where the planning laws have been much more restrictive – prices have gone through the roof due to the lack of supply to meet the higher demand. In the long term this is actually very bad for sydney and will restrict it’s growth potential (the powers that be somehow decided it was wise to stop further population growth – and existing property owners were ecstatic at the prospect – how short term is that ??). My PPR is in sydney and I am gonna have to move to melbourne one day. I don’t like the idea of living in a ‘progressive’ social engineering experiment.
I am amazed that they decided to proceed with the Eureka Tower. It is the tallest residential building in the world – 88 levels. I think they chose 88 to attract Chinese investors as 88 is a very lucky number for them. It is supposedly viewed as a small city within itself. I wonder what the strata fees will be like.
Robert Bou-Hamdan
Mortgage Adviser0414 347 771
[email protected]
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Comments made are of a general nature and should not be construed as individual advice.
© 2004 Mortgage Packaging Pty Ltdcompletion date late 05, Big E should send the top end of the market down. The bottom and medium range bottoms started to fall out already, but 700-1.5M appartments still holding up well. This should sort that out (along with domain, QV, vic point, milano, freshwater, all MASSIVE & sched for 2005 completion). Strata fees probably through the roof (with kinky elevators that go around corners) but not while prices are soft. They are starting to waive strata fees for a couple of years on some developments.
Estimates are the vacancy rate will top out in 2007 with 50% increase in dwellings in the inner city (44k cf 27k in 2006). This means there will be an additional 50k of tennants needed which in the short term will be young professionals and students (good luck in extracting cash out of them). With this amazing disaster Melbourne will take the mantle of commercial capital of oz from sydney. It will be cheap, young skilled labour who will have babies, low commercial and residential costs vs Sydney’s zero polulation growth clover moore fantasy. Melbourne is going to prosper and shoot ahead in a couple of decades.
Now I wonder how low a nice view on big E will get when they have to rent it out to uni students…
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