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Ph (03) 9600 1111
Fax (03) 9278 8830
Level 9, 365 Queen St
Melbourne, Vic 3000
Australia
Southbank Central
Inspect at
191 CityRoad Southbank
Melway: 1D M6
Mon - Sat, 10am to 5pm
Sundays 12 to 5pm |
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News & Editorials Archive
Every week Central Equity writes a number of news editorials which appear in Melbourne newspapers. This weeks article is posted below.
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access our archive of news editorials
07/09/01
Melbourne's new wave of inner city living - Is it fact or fad?
It is hard to believe Waverley Park football ground has served its purpose in the suburbs and has been replaced by inner city Colonial Stadium.
Unquestionably the trend towards Melburnians living in the city is
here. Australian's are seeing a fundamental change in our demographic
make up and our housing needs. We are all aware of our aging population
but maybe you are not aware that over 70% of households today do not
include children.
The Australian dream of mum, dad, two or three children the family home in the 'burbs and the quarter acre block which makes up about 80% of our current housing stock is becoming less relevant to our society's accommodation needs. 60% of women are now in the work force making the challenge of looking after the large family home more difficult.
Social reporters tell us that families are now eating out 3-5 times a week. People have more recreation time placing ever-increasing needs on amenities where we live. Petrol cost and commuting times is generally increasing. Melburnians are well serviced by its train, bus and comprehensive inner city tram network.
If we combine these demographic changes and social need with the under utilised inner city land of the late 80's it is no surprise that there was a demand for inner city housing just waiting to be supplied.
Both sides of government have also recognised the value to the community of supporting the residential renaissance of inner Melbourne. Commencing with the Better Cities Program, which provided a master plan including the redevelopment of Southbank, followed by the Postcode 3000 (CBD) and the strong economic growth of Victoria in the 90's.
During that decade we witnessed over $6 billion worth of infrastructure and capital works projects in and around the city and in Southbank. As you are most probably aware, Southbank is now recognised with its own postcode 3006.
Today further Capital and infrastructure projects continue to underpin the inner city values. Current project include Federation Square, the refurbishment of the National Gallery of Victoria, the completion of the new Melbourne Museum, the opening of the second city link tunnel and the proposed rapid transport link from Spencer street to the airport.
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We can now see that inner city residential development is divided into four separate categories each with their own strengths and weaknesses.
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The first is the premium priced market tailored to a relatively small group of the population who can afford to belong to this often emotionally driven segment.
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The second
is the refurbished market, which has been based on the conversion
of offices and warehouses to residential. This often trendy
market does not benefit from the maximised stamp duty savings
of the off-the-plan market, or of the full peace of mind provided
by the legislated building warranty in 1996. Sometimes residence
also are required to compromise on issues such as natural light
due to the initial purpose for which the building was designed.
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The third group is the targeted service apartment sector which depends largely on tourism or student demands for its viability. A concern with this segment is when an owner wishes to resell his property, the owner occupier which makes up appro 80% of residential purchasers is not likely to purchase in this sector therefore leaving the vendor targeting the remainder 20% of the market to capture that all important capital growth.
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The final sector is what we will call, the main stream, providing an affordable range of inner city accommodation in good locations and meeting the accommodation, design and budget requirements of a majority of both owner-occupiers and investors. Central Equity has elected to primarily locate itself in this segment. |
Interestingly, the current rental market for Central Equity type apartments
is very strong with a vacancy rate of a low 2% when compared with
a balanced rental market of 3% - 4%.
A typical example of this segment of the market (I am entitled to one advertisement) is Central Equity's latest release, Capri apartments, located one block from St Kilda road, near the shrine.
Currently we have seen some small increases in interest rates, which have had marginal impact on demand. There is a reducing number of low priced development sites, there is an indication of some competitive command development returning and an increase in inflationary pressures based on a push for the 36 hour week and the introduction of the GST.
The results of these pressures will in fact reinforce values of current
inner city developments, which are complete, or currently being marketed.
It should be noted that over 60% of developments, which have planning
approval, do not proceed. Although Central Equity can proudly say
that it proceeds with every development that it has marketed.
As the leading, publicly listed, Melbourne based inner city property developer, Central Equity has seen recently as a consequence of these pressures some interstate and overseas developers withdrawing from our market and we believe that in the future only the professional, committed, long term developers will be a strength in the inner city market place.
Again this reduction in suppliers will reinforce residential property values for those who have already purchased or will purchase in this financial year.
For those of you who are interested to know about Central Equity's latest release - Capri, please call 9600 1111 (7 days), as our consultants are always available to assist with any enquires. Alternatively, Central Equity invites all investors to visit the Capri display suite on site at 38 Bank St, South Melbourne (melways 2k G1).
Last week's Grand Opening of Capri saw a huge and fantastic crowds
at Capri's display suite at 38 Bank St South Melbourne. The public
interest for Capri apartments was overwhelming as Capri is the final
stage at Central Equity's Central Garden. Upon the completion of Central
Garden, which comprises the three developments - Vista, Metro and
Capri, the end value is an estimated total of $110 million. Construction
has already begun for both Vista and Metro, as they were sold out
some time ago. Due to the success of the Vista and Metro, Capri is
selling fast, as the demand for inner city apartments is high, and
people are recognising the value of inner city living.
Come visit the Capri display suite at 38 Bank St, South Melbourne (Melways 2K G1). Plenty of free parking on site. Open daily, 12 - 5pm.
Potential purchasers interested in further information about residential development in and around Melbourne, are invited to contact Central Equity on Tel (03) 9600 1111 or inspect www.centralequity.com.au 7 days a week, 24 hours a day.
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for the archive of Central Equity editorials
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