REIV research reveals that the median price of unit and apartment in the December quarter was $365,000, this represents a 1.1 per cent decline from the previous quarter.
Over the last 12 months the unit and apartment market has experienced less volatility than that of detached housing. Over this period the median price of a detached house declined 9.7 per cent from $472,000 to $426,000 whilst the unit or apartment median declined 5.2 per cent from $385,000 to $365,000.
The disparity in median price movement between detached housing and units and apartments is hardly surprising − and not just because of the problems in the world economy. The REIV median for December 2007 showed the single largest quarterly increase in the median price of a Melbourne detached house in the history of the series. Simply put, the price growth was unsustainable and ‘something had to give’.
Further to this, the unit and apartment market is underpinned by several factors. Aside from the tight rental market, there are more significant reasons why the median for units and apartments has not experienced the volatility detached housing has, namely, the significant increase in inner city apartment living and a long-term trend towards smaller household sizes.
Attraction to inner city or activity centre living, frustration with the tight rental market, the Federal Government’s increased grants and bonuses and falling interest rates are providing perspective home buyers with the most favorable conditions in many years to buy their own unit or apartment.
The culmination of these factors means that the unit and apartment market will continue to remain relatively stable over the short to medium term.
If interested in learning more about this update please contact me today!
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