CONFIDENCE is returning to the Melbourne property markets as some sectors weathered the global financial crisis.
According to the Australian Property Institute, metro region residential properties recorded the biggest decline in the first quarter of 2009, whilst the country regions the median house price for from January to September 2009 has virtually remained unchanged.
API President Chris Plant said whilst sales transactions fell in excess of 35% in the 12 months to September, the median residential house price had shown an overall positive growth for metropolitan regions of approximately 6.5% and 2.5% for country regions.
“Not surprisingly high valued areas such as Bayside, Boroondara, Stonington and Port Philip have all had decreases in the median sale price from 2008 to 2009; the growth corridors such as Casey, Cardinia, Brimbank and Hume have experienced positive growth,”
Looking forward, Plant said with three consecutive interest rate rises, the first home buyers boost ceasing as at December 31 the trend for 2010 is yet to be determined.
In the retail sector, API retail spokesperson Steve Simpson said the retail property sector escaped the GFC unscathed compared to the office and industrial markets.
“In major shopping centres for example, rental growth has been underpinned by retail sales growth (as reported by the Australian Bureau of Statistics (ABS)), albeit such growth is arguably linked to the Rudd government stimulus packages,” he added.
Simpson said the notable exception of shopping centres and to a smaller extent, other large retail offers such as supermarkets where yields eased out as supply increased and demand decreased due to tighter credit markets.
But he noted the private investment market has remained buoyant due primarily to a large pool of cashed up private investors in the $5 to $10 million dollar market.
“In the last six months, yields in this market have returned to levels commensurate with activity prior to the GFC and it is not uncommon for retail properties in prime suburban retail strip centres such as Burke Road, Camberwell for sales to reflect sub 5% yields,” Simpson added.
With three consecutive in interest rate rises, the first home buyers grant ceasing as at 31 December 2009 the trend for 2010 is yet to be determined.
API industrial spokesperson Phil Cramer said the GFC severely affected demand for industrial properties, with values falling and yields increasing from the market peak in late 2007.
According to the API, prime industrial values have broadly decreased by between 20% – 30%, with yields softening from circa 7% to between 8% – 9% and secondary property yields have been even more adversely affected.
“Land values have also declined by in excess of 25%, with development being strangled by the lack of development funds available from the major financial institutions,” Cramer added. “On the bright side, the rental market has remained relatively stable, there being no obvious downturn in rental values across the board,”
“Confidence is returning to the market, with an increased number of transactions occurring over the past six months, albeit at the softer yield levels. Melbourne’s excellent infrastructure will assist the growth in the industrial sector at the next upturn,” Cramer concluded.
Propertyreview.com.au
