Prices have fallen across much in the Australian property market following a series of cooling measures in the property market, but it could be an opportunity for cash-rich investors.

Eastlakes is a mixed-use property consisting of retail options and residential units

This has created headwinds for expensive properties while helping to support demand at the lower end of valuations. “The availability of credit has been a significant factor contributing to the slowdown,” Lawless said. He also says that a strong supply pipeline of new apartment stock, at a time when investor demand is likely to be weak, will continue to put downward pressure on prices. According to CoreLogic, there are currently 22.3 per cent more homes up for sale in Sydney compared to a year ago, and 12.2 per cent in Melbourne, contributing to a 7.6 per cent national increase over the same period. Total listing levels have also increased in Brisbane, offsetting declines in all other capital cities.

Artist’s impression of Eastlakes’ living room

POPULATION GROWTH
Still, according to a recent report from Knight Frank, strong economies and significant population growth in both Melbourne and Sydney mean it is like most new stock will be absorbed, and price growth will return by the end of 2019. Population in Greater Sydney (estimated at 5.1 million in 2017) is experiencing an annual population growth of 2.0 per cent and the population projection is set at 1.4 per cent per annum until 2036. Greater Melbourne (estimated at 4.8 million in 2017), is experiencing an annual population growth of 2.7 per cent and projection is 1.7 per cent per annum until 2036.

THE PRICE DECLINE IN PERSPECTIVE
A broader perspective reveals a property market that is really travelling sideways says Alan Oster, NAB’s chief economist. “People say ‘well it could fall 10 per cent’… Well, yes but it’s still 30 per cent above where it was two years ago,” he says.

Falling prices could also provide an opportunity, particularly for first-time homebuyers. Where once the market was driven upwards by buyers’ fear of missing out, now they can afford to wait and see. “It’s certainly a good opportunity, but I’d say it’s probably going to get better,” said UBS economist Carlos Cacho. CoreLogic expects prices will continue to fall in the second half of the year, albeit in a measured manner.

Aerial view of Eastlakes project

NEW SUPPLY
Developers are pushing ahead with new projects across all major cities. In Sydney, Australia’s Crown Group have several premier projects underway, including a design-driven development called Mastery, located in the city’s inner suburbs, that is a collaboration between Japan’s Kengo Kuma and local architect Koichi Takada.

Green Spine is Australia’s new tallest tower in Melbourne

The group has also launched a new development called Eastlakes, located six kilometers from Sydney’s CBD. The mixed-use project will include a restaurant promenade, street cafes, a medical center and landscaped gardens. The first phase includes 134 apartments ranging from one-bedrooms to penthouses. Prices start from USD 479,000. The Victorian Government has also approved plans for Australia’s tallest building — a six-star, 90-storey hotel and apartment complex to be built by casino operator Crown Melbourne. The property will feature 388 hotel rooms and 708 residential apartments and will be built near Crown Casino in Southbank and rise to 323 meters. The Australia 108 residential tower, also being built at Southbank, is planned to be 319 meters.

For more information: https://apartments.eastlakeslive.com.au (Eastlakes); https://beulahinternational.com/ (Green Spine)