Property analytics firm Propertyology earlier this week issued a stark warning for the property market in Melbourne, citing severe oversupply concerns and economic woes stemming from the closure of car manufacturing plants.
Propertyology market analyst told Your Investment Property Magazine that the next two years are likely to poor in terms of market performance in Melbourne and it is likely that “Melbourne’s performance will be significantly lower than whatever is broadly happening in Australia in 2017.”
But Nathan Blackburne, Victoria and Queensland state manager for developer Cedar Woods, which is currently undertaking a 57 one- and two-bedroom apartment project 19km south west of the Melbourne CBD in Williams Landing, believes any troubles experienced in the Victorian capital will be isolated.
“The over supply concerns are mainly centred around city or inner city areas and one of the great things about the middle and outer suburban areas apartment projects is that there’s very little competition,” Blackburne said.
“From a general residential perspective, the western suburbs of Melbourne have been some of the strongest performing in the country and that will continue to be the case going forward,” he said.
While the exit of car manufacturers Toyota, Ford and Holden from Melbourne could see close to 100,000 jobs impacted, Blackburne believes Melbourne’s economy has the diversification needed to survive.
“The thing we like about Melbourne is that it has such a diverse economic base. There’s not one or two industries that are dominant. The employment base is quite diverse and that’s likely to continue going forward. The economic projections for Melbourne and Victoria are relatively positive,” he said.
“Melbourne will continue to be popular with people wanting to migrate to Australia because of the education offerings and to join existing family.”
Cedar Woods claims 90% of the apartment project has already been sold, with interest coming from both owner occupiers and investors who have been increasingly drawn to real etate on Melbourne’s outer fringe due to affordability and improved links to the city.
“There are some people who want to be close to existing family and social networks and therefore will value middle or outer suburban locations. They get the best of both worlds if they can move into a non-central location that has high amenity.
“That is possible with a project like Williams Landing because it has the transport infrastructure and town centre amenity that will make those residential densities viable.
“Prices range from $290,000 - $400,000 and that’s a major driver of sales for both owner occupiers and investors. There aren’t many other locations in Australia where you can access a quality property developed by a reputable company in attractive location [for that price range]."
