hockingstuart news items

Market Wrap -The Melbourne Metro Rail

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New York is home to the Underground, London has The Tube, Paris has the Metro, and soon Melbourne will boast the Melbourne Metro Rail.

This week the Andrews government confirmed plans for the largest public infrastructure project in Victoria’s history – the Melbourne Metro Rail – to bring our city up-to-speed with the world’s best.

The multi-billion dollar plan includes five new train stations, two nine-kilometre tunnels and will carry 20,000 extra passengers during peak hour.

The extra services will be welcomed as our city’s population is forecast to increase to seven million by 2013. Melbourne is growing fast – we’re seeing apartments erected in the city and new housing estates emerging in the fringes each day. Yet the increased volume of people is playing havoc on our roads where traffic congestion woes are worsening.

The big question is whether Melbournians will opt for the train over their beloved cars.

For instance, a recent Liveability Index conducted by The Age showed many of Melbourne’s suburbs rich in public transport are in fact home to some of the worst traffic conditions, because many people still prefer to travel by car.

Time will tell if the Melbourne Metro Rail will be embraced by Melbournians over their personal vehicles – however it is no doubt a step in the right direction towards improving facilities to manage growth.

Market Wrap – Surge in First Home Buyer Activity

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Victoria is seeing a surge in first home buyer activity, with the latest ABS figures showing the state is leading the charge when it comes to lending approvals.

The number of loans granted to Victorian first-timers was up 5.7 percent in the first nine months of 2015 compared to the same period last year – substantially greater than Queensland which only grew two percent, and the other states where loans dropped.

This increase is largely due to the availability of affordable land in the city’s fringe areas where there is now improved infrastructure and public transport. For instance, house and land packages in estates in the outer rings have gone gangbusters. Our Melton and Caroline Springs offices have seen a substantial increase in young buyers seeking land this year too.

Low interest rates and the directives from APRA have also played a hand. With investor lending tightening and less competition for apartments and family homes, first home buyers now have a foothold in both the inner city and outer suburban markets. Lower interest rates for owner-occupiers also means it’s more affordable for youngsters to buy rather than to rent.

Looking into 2016, with interest rates remaining low and the market moderating, the signs are positive for those wishing to purchase their first home.

Market Wrap – Reining in the number of skyscrapers in Melbourne

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Nigel Market Wrap

The Andrews government is reining in the number of skyscrapers in Melbourne, announcing changes to the heights and densities for new CBD buildings. Under the new interim laws, city towers will be restricted to 24 floors. Although, developers can apply to go higher if they provide offsets such as open space.

According to Planning Minister Richard Wynne, strategic CBD planning will help Melbourne retain its charm and integrity amongst the flood of apartment towers erected in the CBD in recent years. In fact, building approvals in the city hit a record high under former planning minister Matthew Guy.

The government states a high concentration of towers mean neighbouring buildings rely on borrowed light and suffer from poor ventilation. Over development also puts a strain on infrastructure such as roads and public transport. However, developers argue that the new changes will limit the ability to deliver the housing our community needs on the back of demand for inner-city property. Pundits also state that “integrity” of the city depends on building design, not just height. Additionally, these changes will restrict development, cut jobs and undermine investor confidence in Melbourne.

The verdict is still out, however, with the halt on height running for an initial 12-month period. It’ll be interesting to see how the ‘liveable CBD design’ debate pans out over the coming year.

Market Wrap – Owner Occupied Mortgage Commitements

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Nigel Market Wrap

Last week the Australian Bureau of Statistics announced that the number of owner-occupied mortgage commitments in March hit its highest level in six years, rising more than five per cent in the last year alone.

However, the same data also revealed that lending to owner-occupiers for new homes dropped by almost five per cent over the same period. In fact, the Housing Industry Association forecasts that new home supply is expected to decline by more than ten per cent in the coming years. As Melbourne’s population is predicted to swell to eight million by 2050, our city will need more than 720,000 homes to accommodate residents, which means demand for housing will rise. The basic principles of supply and demand tells us that if new housing stock is low, then competition for existing homes will rise.

This is undoubtedly good news for Vendors – but competition won’t sell a home alone. The basic selling tips still apply. Remember to present your home well, ensure the kitchen and bathroom are in good condition and find a local agent who understands the area, so you can secure the best possible price.