Where to invest in property in Melbourne

What the media does not tell you about the Intrinsic Growth of Melbourne – 1 Million new Residents and 620,000 new dwellings!

It is obvious that bad news sells, it is a downright shame that people like you have little public access to this information regarding the future planned growth of MELBOURNE and why  Investing in Property  in MELBOURNE makes sense!

… those in the know have clearly identified the opportunities and because your success is our success we want to share what is really happening by Design in Melbourne with you!

POSSIBLY LIFE ALTERING INFORMATION … enjoy

Why Melbourne

Melbourne is fundamentally a different city to what it was 5 or 10 years ago, Melbourne is growing up and becoming recognised as a World City!

The only people to underestimate Melbourne are Melbournians themselves! People do not understand or comprehend just how fast Melbourne is growing!!

State Planning Minister Matthew Guy said “growth is sustainable if managed properly, we need to look at sites in and around the Melbourne Metropolitan area and the city area, clearly where there is very strong demand and where we can accommodate large population change and population growth, around existing transport services, close to employment.”

 

What is driving Melbourne as a city in the context of the Apartment Market?

  • Population growth estimated 60,000+this year
    • Equating to around 1000 new arrivals per week
    • Melbourne’s massive population increase is resulting in a Boom in the Apartment Market. This is positive news!
    • Victoria is estimated to attract around 90% of the net overseas migration into the state
    • Melbourne has grown by over 600,000 citizens over the past 9 years heading up to 1,000,000 by the year 2020
  •  Melbourne will grow by another 1,000,000 (One Million Residents) or 620,000 new households by the year 2030 – see Melbourne 2030 reports below
    • Can you comprehend the opportunity
    • Why does the media blind you to this opportunity by only focussing on what is happening today, property is a medium to long term investment
  • Shortage of dwellings between 20,000 conservative estimate up to 40,000 depending on whose figures one looks at [still a large undersupply]
    • Building approvals have dropped in numbers
    • Remembering that by 2030, only 18 years away 620,000 new homes will be required
      • That is over 34,000 per anum

 

  • Affordability of buying one’s own property is at an all time low for the majority of Australians

    • Placing Increasing Pressure on available rental accommodation
    • Creating an ideal Investment Opportunity of securing wealth by providing Rental Property

 

  • With affordability dropping, choice of dwelling drops and apartments become the solution – as they slide under the affordability threshold
    • With 80% of the population being able to afford to own or rent a property in the $350,000 to $650,000 band
    • There are simply insufficient properties available in the price range in the inner fringes to meet this growing demand
    • … creating and stimulating a positive effect on the apartment market

 

  • Another long term driver is the low vacancy rates experienced across Metropolitan Melbourne during the last 7 years being under 2% and as low as 0.5% in some areas
    • This long term statistic is highly favorable to landlords
    • Too few rental dwellings available in the inner fringes, continue to support a strong rental income
    • An under-supply of rental accommodation + low vacancy rates + higher demand for rental accommodation = higher Rental Increases and tenant occupancy times

 

  • Rental growth has been consistent during this period and continues to strengthen as demand increases
    • New apartment stock is attracting a higher level of rental income (4.5% to 5%) verse older style apartments thus benefiting you the Investor

 

  • Melbourne is fundamentally an Investor Orientated market with the majority of new development stock being targeted towards Investors
    • Off the Plan is ideally suited to investors – even though it may cost more per square meter; off the plan costs less per week negatively geared than similar existing property.
    • Did you know :
      • Of all the Off the Plan apartments currently under construction, 88% has already been bought
      • Off all the Off the Plan apartments yet to start construction, around 64% has already been bought
        • This Positive Statistic is not reported in the media … unfortunately

 

  • Apartments make up only 7% of all dwellings, the potential and positive implications in this ‘propertunity’ for you is enormous
    • with the majority of Australians only able to afford units or apartments in the Metropolitan areas

 

  • Melbourne has the lowest unemployment figure throughout Australia … positively underpinning the value of property

 

  • Melbourne has been ranked number 1 (again) as the World’s most Liveable City!

 

  • Australia remains amongst the best advancing economies in the world

 

  • Melbourne is being planned as a First World City (similar to New York, Paris, London etc) – review Melbourne 2020 and Melbourne 2030 plans
    • Planned to grow larger than Sydney, in size and population
    • Consider the incredible implications and opportunities for you as a direct outcome – this is a planned growth it will happen

 

  • Planned Growth results in higher density inner suburb living. The construction of apartments to cater towards the current level of affordability and choice of lifestyle will grow en masse to meet a new and higher demand

    • People want to live close to where they work, play and socialise
    • Majority can only afford to own or rent an apartment in the Inner Fringe suburbs
    • Increase of owner occupancy and Rental demand

 

  • There are only around 3000 new apartments coming to market in 2011
    • We are now down to 0.4 of one year supply left in the apartment market, meaning that of all the supply of new and off the plan apartments in the market it has been met with demand
      • In 2012 the supply figure will be around 5000
      • In 2013 this figure expected to rise to 9000

 

  • With the current under-supply of dwellings, this gap will certainly widen as supply fails to keep up with demand and an increasing population
    • The principal in economics of where demand out strips supply equates to higher prices and values

 

  • Are you aware of the statistics which demonstrate that 60% of Australian dwellings will be occupied by singles or couples during the next decade
    • Once again demonstrating the incredible need for targeted dwellings to cater for this growing market

 

  • The largest market for apartments is made up of singles moving out of home, young couples moving in together, divorced individuals downsizing and baby boomer downsizers
    • Apartment living for singles, couples or families is becoming an acceptable norm and a lifestyle choice of many
    • Driven by affordability, location, minimised commuting times, entertainment, shopping, social networks etc
    • Apartments are the solution to an increased percentage of the population to own or to rent as a direct result of affordability

 

  • Vacancy rates remain below 2% (sitting around 1.5%) predicted to remain low into foreseeable future

 

  • Growth Suburbs include : Northcote, Preston, Coburg, Brunswick,Yarraville, Footscray (Inner North and Inner Western suburbs). Established inner fringe suburbs continue to perform in values below $600k where the demand for property is highest
    • Local governments pouring millions of dollars into what they term satellite cities of Melbourne to minimise the impact of higher density inner suburb living; including suburbs such as : Frankston, Dandenong, Berwick, Coburg, Footscray, Werribee and Geelong. Improving local infrastructure and services
    • Coburg and Footscray are within 8km of the CBD, making them viable investment opportunities resulting in increased values because of Government Investment and planned population growth in these areas

 

  • Interest rates drop by .25 basis points and look to drop another .25 basis points during December
    • Encouraging sign for investors and Australian Economy

 

  • When stock markets behave as they are including and post GFC, history shows a shift to the safety of bricks and mortar … to secure ones investments
    •  Australia is an emerging economy whose property prices have been relatively unaffected by the GFC with indications of a possible bottoming out
    • Prediction : Once market sentiment changes back to pre GFC (in the near future) and falls in line with what is being shared with you today, there is every opportunity that the price per square meter will rise as demand outstrips supply in the apartment and townhouse markets

 

  • Cost of new developments will increase – Putting on hold ones off the plan investment decision could cost the investor more as building costs rise, labour fees increase, occupational health and safety plus Carbon Taxes will add costs
    • Meaning the very next development coming to market will be at a higher rate per square meter than the one available today
    • Construction costs alone for 2011 has increased by 7%

 

  • Melbourne inner suburbs is the fastest growing region in Australia
    • with 75% of Melbourne population living within the inner suburbs and more wanting to do so

 

  • Irrespective of property cycles Melbourne will be a strong Apartment City in 5, 10, 15 and 20 years time
    • Today only 3% of Australian population (astonishingly low figure) live in dwellings that have 3 or more levels, this figure will undoubtedly grow in the future … the fundamentals dictate it!
      • Only 17% of this 3% is in Melbourne with the majority in Sydney
      • Melbourne is Changing!

 

  • There is a wide gap to be filled by developers, with planning permits having doubled during the last 3 years to meet the demand – meaning there is a structural shift starting to occur in Melbourne
    • Melbourne is only at the beginning of its phase of becoming an Apartment City, which will become the norm of Gen Y and their offspring of the future

 

  • Melbourne is fundamentally an Investor Orientated market with the majority of new development stock being targeted towards Investors
    • Off the Plan is ideally suited to investors wanting to increase wealth, plan for retirement, minimise personal income tax or wanting a safer option within their SMSF

 

  • If Melbourne were a share on the stock exchange … everybody would want to own shares in Melbourne!
    • Now YOU can


Our Investment Philosophy : “When Investing in Property, Invest in the best opportunity that is of medium to high density, in the inner urban suburbs, in a major metropolis and in property that most people can afford to own or occupy!”

 

Comments or questions are welcome.

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