What is the ideal ‘density’ of a townhouse development?

Across inner Melbourne, townhouse developments are becoming increasingly common. With limited block sizes closer to the city, developers have to constantly negotiate the size of the actual house with the amount of land available. Because of these varying levels of building density, Secret Agent wanted to find out if there was a ‘sweet spot’ in the ratio between indoor area and land area. Are we paying more for a certain ratio? Read the full post

This week, Secret Agent compares new and old apartments around inner Melbourne to see which were more valuable in 2016.

The sample included 1674 apartment sales across inner Melbourne’s suburbs and the CBD from January to December 2016. New apartments are those built from the 90s onwards, excluding any recent off-the-plan apartment sales. Old apartments include Art Deco units and flats located in 60s to 80s brick buildings. Read the full post

How much more are we willing to pay for a cross ventilated, well-lit apartment with a balcony and open views?

In March this year, apartment design standards will be implemented into the Victorian planning system. Apartment design standards will ensure all future apartments in Victoria are desirable, safe, healthy and sustainable. New developments in Victoria will only be permitted a planning permit if they meet these standards. A 2015 community survey found that the top concerns of apartment amenity were “access to daylight, functional space, and natural ventilation”, as well as noise and energy efficiency. (DELWP, 2)

Standards have been made for 16 elements of design: Building setback, functional layout, room depth, windows, storage, noise impacts, energy efficiency, solar access to communal open space, natural ventilation, private open space, communal open space, landscaping, accessibility, building entry and circulation, waste and recycling, integrated water and storm water management.

It is logical to think that better design standards should produce apartments of a higher quality. This in turn should increase the sale price of these apartments. Secret Agent was engaged to determine the price premium of better designed apartments. That is, how much more are consumers willing to pay for an A grade apartment compared to a B grade and C grade apartment? Read the full post

This week, we take a closer look at balconies and other types of outdoor area in apartments. While no doubt desirable, many developers are uncertain how much value outdoor space will create for them. This was reflected in our Supply report, which showed that outdoor space for both one and two bedroom apartments being planned in Melbourne was barely above the minimum suggested in the Victorian Government’s recent apartment design standards draft. Read the full post

Secret Agent would like to wish you a Merry Christmas and Happy Holidays!

Thanks for your support this year and we look forward to catching up in the new year.

Our office will be closed from the 24th December 2016 to 8th January 2017.

We have just released our latest Secret Agent report!

In this issue, we provide a deep overview of the year in terms of the yield curve, apartment price per square metre rates and capital growth, concluding with a wrap up of each area’s performance in 2016.

From all of us at Secret Agent, we wish you a very happy holiday season!

Access the 2016 End of Year Review report now!

A look at the bond market reveals a very large jump in bond yields the day after Trump was elected.

What a year it has turned out to be. From the mild (Western Bulldogs Premiership) to the momentous (Brexit and Trump presidency), 2016 has seen it all. Before discussing more recent events, let’s take a look at how bond yields have been performing since our last update in September. Read the full post

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

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.

Click to view table in fullscreen mode.

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.

Read the full post