The Melbourne Apartment Market Conditions research report provides a timely look into current and forecasted conditions for established Melbourne’s apartment supply.
Read the full Melbourne Apartment Market Conditions research paper here.
Key Takeaways
The active pipeline of apartments going forward is around half the volume delivered in Melbourne’s peak of 2015-2017.
2016-21 saw 12,265 apartments per annum while 2022-27 is forecasted to produce only 6,780 per annum.
Of all the potential supply in the pipeline, around half remains inactive: approved, but unable to proceed.
35,000 approved dwellings are yet to have commenced.
Despite more than 12,000 Build To Rent apartments in permit-approved and under-application projects, only 48 per cent have financial backing.
Melbourne’s rental vacancy rate stood at 1.3% in May 2024, this has driven up the median weekly rent by 4.8% over the past year and 16.4% on average over the last three years.
Based on the existing inner and middle Melbourne pipeline and current forecasted demand Melbourne will be in deficit of circa 52,800 apartments by 2029.
The existing tax regime including Foreign Purchaser Additional Duty and the changes to off-the-plan concessions have impacted the apartment market supply pipeline.
Halving existing duties could double the sector’s output and catalyse approximately $641 million in tax revenue.
