What is REALLY happening in the inner-city apartment market?

Well, the team at Lucas found out. We were fortunate enough to have an exclusive tour of the realestate.com.au headquarters, where we had the chance to listen to one of their top economists. Here are my top three takeaways from the presentation …

1. Demand for inner-city apartments for both sales and rentals is rising, but interestingly, more investors have been selling than buying. This is due to several reasons, including increases in interest rates, changes to legislation that (in some cases) has negatively impacted rental providers, and the demand from first-home buyers.
    
2. The search criteria for three-bedroom apartments on realestate.com.au has increased from 30 per cent to 41 per cent over the past three years, driven by the value for money in the inner city and the shift to remote work, leading to the increase of families moving into the city.
    
3. Supply constraints are also causing prices to rise in the city, with population growth in Melbourne City reaching 16 per cent over the past five years and building costs growing at the fastest rate in 40 years. Major developments in the CBD, Docklands, and Southbank are also struggling to get off the ground, further decreasing supply in the market.

April is typically a slower month for the property market due to the multiple long weekends; however, inboth the sales and rental market there has still been an abundance of activity. Over the past month, we received more than 1000 new buyer enquiries and more than 3500 new tenant enquiries, and our open for inspections have been incredibly well attended. Another interesting statistic that took us by surprise at the PropTrack presentation was the perception from vendors as to whether or not now is a good time to sell.

According to realestate.com.au, just 19 per cent of current property owners think now is “a good time to sell” compared with 48 per cent in April 2021.

We found this remarkable, given the exceptional results that we’ve experienced in Melbourne, Docklands and Southbank so far this year. •

lucasre.com.au