Having already fallen from peak by 5.7% (Sydney), 1.3% (Melbourne) and 11.2% (Brisbane), according to CoreLogic, Finder.com.au predicts that apartment values will fall another 8% across the East Coast in 2019. From The Australian:
Sydney’s market will take the biggest hit. A reduction of 8.44 per cent is expected to knock almost $60,000 off the average unit price. At a rate of 7.13 per cent, Melbourne units will become $33,350 cheaper…
“Those in the market for an apartment face a much grater risk of losing equity compared to those buying a house, due to an oversupply of units in capital cities.
“Property on the outskirts of cities will experience a much more significant drop than those in the CBD, as demand is generally not as strong in these areas” [Graham Cooke, Insights Manager at finder.com.au, said]…
Last month, CoreLogic released data on the number of dwellings under construction across Australia, which highlighted growing settlement risk across the Melbourne and Sydney unit markets:
As shown above, a near record number of units are under construction across Sydney and Melbourne, which will literally flood these markets with supply.
Melbourne, in particular, already has a high share (11%) of units selling for a loss – a situation that is certain to deteriorate as units are dumped onto the market:
If you are an investor or first home buyer, avoid this segment like the plague.
