Official Newsletter of Hamton Property Group

Market Update by Steve Buxton

The townhouse and apartment market has remained comparatively buoyant over the past 12 months despite other parts of the residential property market, particularly the upper end, falling off in value.

Despite enormous improvements in home loan affordability resulting from the lowest interest rates we have seen in many years, renters continue to find market conditions challenging. The credit squeeze being experienced locally has seen many unit and apartment developments being deferred which has contributed to rents rising by around 11% and vacancy remaining at around 1%. Over the coming 12 months it is likely this issue for renters will worsen.

We are hearing reports from our network of some properties starting to return positive cash flow, and certainly with depreciation and other tax benefits factored in, soon to be completed Hamton developments such as Baymarque, Society, The Rathdowne and Rize are looking extremely solid as investment prospects.

We expect to see continued growth over time in values of new apartments and townhouses with:

  • the likely exacerbation of Melbourne’s undersupply (it is forecast we will produce 18,700 too few homes in 2009 and 22,300 in 2010);
  • last year’s tax cuts, combined with record low interest rates and the Federal Government’s stimulus package has seen savings increase dramatically; and
  • continued turmoil in the share market will likely see a return to the relative safe haven of bricks and mortar as investors look to further de-risk their portfolios.

All in all we think it is a great time to get organised to ride the next wave of the property upswing.

To read recent newspaper articles on the current market visit the Industry News section of the Hamton website.