Development moves away from Melbourne’s CBD
Many property developers are refocusing development pipeline strategies away from Melbourne's high-density CBD sites to hone in on DA-approved boutique developmental sites three to 15 kilometres from the CBD, according to new data from PermitReady.com.au, one of Australia’s leading online development portals.
The trend shows a surge in demand for medium-density development sites with permits in Melbourne’s inner and middle-ring suburbs.
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Permit Ready managing director Nick Materia said this is particularly the case as rising house prices push demand for townhouses and apartments.
Mr Materia said new Permit Ready figures point to an increased demand for well-serviced townhouse and apartment projects.
He said interest for middle-ring development sites in Melbourne are up more than 60 per cent in the 12 months to October 2016,
Mr Materia also said developmental approved land offerings averaging nine kilometres from Melbourne’s CBD continue to attract strong enquiry levels from both developers and investors.
“Additionally we have noticed a number of leading development groups focusing on delivering townhouse projects over apartment products,” he added.
“In part this is a result of financial constraints, supplier demand, pre-sales demand and efficient construction timelines and the reduced costs associated.”
Mr Materia said competition is still tough but opportunities are opening in suburban regions as CBD investment and construction is pulled back.
“The CBD market can be considered crowded, and the results show many developers and investors are looking further out for a quicker return which is highly achievable during the current cycle.”
He added that some developers might be considering CBD site opportunities as “buy and hold” investments for the next property cycle.
