Research undertaken by the REIV reveals that the 2008 median for units and apartments was $370,000, up 4.2 per cent, compared to the detached housing market, which was $433,000, an increase of just 3.1 per cent.
Melbourne’s tight rental market helps to explain why the unit and apartment market is relatively stable as it provides ongoing incentives for investors to enter the market.
Aside from the tight rental market, there are perhaps more significant reasons why demand for units and apartments has increased more than detached housing has. ABS data shows a long-term trend towards smaller household sizes and the Federal Government’s increased grants and bonuses have provided many first homebuyers with the opportunity to purchase more affordable units and apartments.
All ten of the most expensive suburbs for apartment-hunters posted a median price in excess of the annual median of $370,000.
Six of the ten most expensive suburbs are located in the Bayside area. Topping the list was East Brighton with a median of $732,000, followed by Brighton at $680,000 and Beaumaris whose median was $620,000. Completing the list were Toorak at $606,000, Hampton at $550,000, Camberwell at $540,000, Black Rock at $530,500, Port Melbourne at $530,000 and Docklands whose median was $525,000.
Some suburbs suffered large decrease in value for units and apartments in 2008. Albert Park dropped 24.2 per cent in 12 months, but this must be measured against a 59.2 per cent gain in the five years to 2008. The story is similar in Black Rock, which declined 17.9 per cent for the year but a five-year increase of 42 per cent.
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