Melbourne apartment developers are resorting to giveaways of free marina berths, $40,000 furniture packages and stamp duty rebates of up to $45,000 to attract off-the-plan buyers in an increasingly flooded market.
There were 23,325 new apartments granted planning approval in the 12 months to February, driven in part by interventions by Planning Minister Matthew Guy to approve a host of new skyscrapers.
It represented a 19 per cent jump in approvals from the year before, when 19,530 apartments were given the green light, according to the Australian Bureau of Statistics. That compares with just 11,258 five years ago under the previous government and during the credit crunch.
Andrew Perkins, of real estate group Oliver Hume, said the rush of approvals had resulted in a record number of off-the-plan sales campaigns competing for buyers.
There are currently about 300 developments being marketed in Melbourne, with 35,700 proposed apartments for sale.
Independent property adviser Mark Armstrong said the glut of apartments meant current apartment owners were unlikely to have much capital growth in their asset for years to come. ”The reality for existing owners is that the value of their properties is always going to be below what developers are selling the new ones for,” he said.
The record competition has pushed even established developers such as Mirvac to resort to extra incentives for buyers.
Mirvac is offering buyers of million-dollar apartments at its proposed Docklands Yarra Point development a bonus berth at the local marina on a leasehold until 2030. A 17-year lease at Mirvac’s Yarra’s Edge marina sells on the open market for $120,000 for the smallest berth (12 metres). A large number of the 149 marina berths are still for sale.
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