News

The latest happenings in the Melbourne property market. For our Essays and The Secret Agent Report, see our Research page.


Category Archives For: Melbourne Real Estate News

Warehouse Apartments in Melbourne: What They Cost

Infographic showing the average price per square metre of 2 bedroom warehouse apartments

Who knew that the walls of former breweries, factories and mills would become one of the most irresistible apartment styles to own and occupy in inner Melbourne.

Warehouse apartments are unique in that they successfully and seamlessly merge historic and trendy. Characterised by their exposed brick walls, steel trusses, sleek interiors and impossibly high ceilings, warehouse style apartments are limited in supply, further adding to their appeal.

In this bulletin, Secret Agent examines inner Melbourne’s warehouse apartment market. Read the full post


What Melbourne’s Apartments Will Cost You

In this update, we present a more thorough look into the price per square metre rates of apartments by suburb, further categorising sales according to the number of bedrooms. These results are shown in Table 1.

The overall average price per square metre rate for apartments in inner Melbourne is $8,687/sqm. 

Overall, the three most expensive suburbs to purchase an apartment  are Albert Park ($13,276/sqm), East Melbourne ($11,914/sqm) and Middle Park ($10,720/sqm). These areas have consistently topped our index.

The least expensive apartments per square metre can be found in Travancore ($6,563/sqm), Kensington ($6,869/sqm) and Flemington ($7,079/sqm).

A few things can be observed when considering apartments with a larger accommodation. In some suburbs, the increase in number of bedrooms also leads to an increase in price per square metre, as seen in the CBD region, Carlton, Collingwood, Clifton Hill and South Yarra.

We can see that most of the inner North and inner West suburbs tend to have decreasing price per square metre rates as apartments grow in accommodation size. However, note that some of the data may be inaccurate due to the small number of sales available for that particular apartment type.

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Click to view table in fullscreen mode.


Melbourne, Docklands and Southbank: Capital Growth of Apartments

Secret Agent’s apartment capital growth index tracks price changes of the same apartments over time. Rather than simply using average price changes, basing the index on resales gives a better measure of true capital growth. The index tracks how apartment prices change when buying off the plan, as well as all subsequent sales of the property. This bulletin takes a closer look at apartments in Melbourne CBD, Docklands and Southbank. Note that when talking about annualised growth rate, we are referring to converting the growth rate over one quarter to an annual figure.

Since 2009, CBD and Southbank apartments have been growing in value at about the same rate, with the CBD slightly ahead for all but the first quarter of 2016 (Figure 1). Since the end of 2011, CBD apartments have grown in value by an annual average of 2.83%. while Southbank apartments by 2.60%. Over the whole time period, Docklands growth was well below the other two suburbs, averaging 1.40% over the past five years.

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New apartments: What to expect

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[Click to view image in full size]

Key findings

  • 1 bedroom apartments will be 8% bigger on average.

  • 2 bedroom apartments remain the same size.

  • 3 bedroom apartments will be 4% smaller and remain rare.

  • Little to no 4 bedroom apartments are being proposed.

  • Most apartments meet the minimum balcony size.

Following up on our recent Supply report, Secret Agent wanted to dig deeper into what sort of apartment buildings are being proposed by developers. Using planning permit applications sent to local Melbourne councils, we sampled 1,680 proposed apartments from 34 buildings in 15 suburbs of metropolitan Melbourne.

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Bond Yield Update: September

There are two ways to be a consistent winner in investment: information asymmetry (mostly through insider trading, which is illegal) and holding assets in the long term. Both of these methods are protected from short-term volatility.

The first expects and profits from these movements (often very risky as all public information is already factored in the price), while the latter can safely ignore the daily peaks and troughs, knowing that these will cancel out over a longer period of time. Investing for long-term returns and robustness is the appropriate reason to buy treasury bonds, yet it is very counterintuitive for most of us to ignore weekly or monthly yields (even changes over one year can be irrelevant with the right strategy).

Business Insider recently published a story called “The week is underway and Australian bonds are getting destroyed” with an image of a building being demolished. Yet as the article correctly points out, yields are still below pre-Brexit levels (bond yields rise as prices fall), which was less than three months ago. It can be difficult to separate signal and noise from information when there is such an abundance of data.

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7 Reasons Future Apartments Still Disappoint

Size is yet again compromised in the apartments soon to be developed in Melbourne, but not just in terms of their total floor area. Here are 7 primary observations about the upcoming supply of apartments in Melbourne over the next 12 to 18 months.

1. Balconies remain small

Whilst most apartments will have a balcony, many will have one that is too small (less than 8m2 for a single bedroom and 10m2 for a two bedroom apartment).

2. Snorkel bedrooms are common

This L shaped layout is an ineffective way to provide light access to a second bedroom in two bedroom apartments. The snorkel is often too narrow to be habitable and the natural light often does not reach the actual room. These are still a popular option despite the waste of space.Blog-1  Read the full post


The Secret Agent Report – Melbourne’s Supply of New Developments

We have just released our latest Secret Agent report!

Demand is a hot topic in the apartment market at the moment, and assumptions about what buyers want are being made by almost everyone with the right to an opinion. Predicting future demand for a property is one way for investors to estimate the future capital growth of an asset. However, too little attention is paid to the supply side of the equation.

In this report, Secret Agent will move the focus from demand to supply, and forecast Melbourne’s upcoming stock of new developments.

Access the Supply report now!

You can also explore our interactive map of Melbourne’s supply of new apartment and townhouse developments here:

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Inner Melbourne’s Smallest and Largest Apartments

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Inner Melbourne’s apartments are getting tinier with each new development. But, how small is small? Secret Agent’s updated apartment index reveals that the average size of a 1 bedroom apartment is only 47sqm, and for the more popular 2 bedroom apartment the average size is 73sqm.

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Inner Melbourne’s Most Affordable and Expensive Apartments

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Secret Agent has updated its price per square metre index for secondary apartments in inner Melbourne. An additional 478 apartments have been added to the index so that it now consists of a total of 870 apartments which have sold between 1st January 2016 to 30th June 2016. The new average square metre rate for apartments in inner Melbourne is $8,679/sqm.

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Bond Yield Update: August

“Record low interest rates”. This seems to be the headline of the year, having been used so many times it is hard to remember any other kind of interest rate. Each time we see this, expectations for another rate cut decrease momentarily, only to return to the same, pre-cut probability-levels after a few weeks.

Figure 1 paints a clear picture of a similar short-term outlook, yet weakening long-term expectations. While this graph does not include data since the rate cut (yields on 10 year treasuries have lifted a whopping 0.03% since the July levels shown in Figure 2), we can see almost identical movements at each maturity date from May to June and from June to July.

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