{"id":4100,"date":"2015-04-22T01:00:47","date_gmt":"2015-04-21T15:00:47","guid":{"rendered":"http:\/\/realestatetalk.com.au\/?p=4100"},"modified":"2015-04-22T01:00:47","modified_gmt":"2015-04-21T15:00:47","slug":"how-oversupply-of-apartments-in-melbourne-makes-area-selection-critical","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/how-oversupply-of-apartments-in-melbourne-makes-area-selection-critical\/","title":{"rendered":"How oversupply of apartments in Melbourne makes area selection critical?"},"content":{"rendered":"

<\/h4>\n

In today’s show we talk with\u00a0Greville Pabst<\/strong>, from\u00a0WBP Property Group<\/a>,\u00a0one of the judges on\u00a0The Block, <\/i>about a possibility of over-supply in the Melbourne market and how it will relates to the unit market.<\/p>\n

Transcript:<\/b><\/h4>\n

Kevin:<\/b>\u00a0 In the past, we\u2019ve talked a reasonable amount about a possibility of over-supply in the Melbourne market, and it particularly relates, a lot of commentators will tell you, to the unit market. I guess that makes selection criteria very, very important for you if you\u2019re looking to buy a unit in Melbourne \u2013 and no doubt a lot of people will. And they should, otherwise there\u2019s going to be even more of a problem.
\nGreville Pabst is a buyer\u2019s agent with WBP Property Group and is also a familiar face on television because he\u2019s one of the judges on The Block<\/i>. He joins me.
\nHi, Greville.
\nGreville:<\/b>\u00a0 How are you, Kevin?
\nKevin:<\/b>\u00a0 Good. Greville, what\u2019s your feedback? What are you seeing about apartments in Melbourne? Is there an over-supply?
\nGreville:<\/b>\u00a0 The oversupply question is an interesting one. Look, property growth and performance really is based on where the population shifts are. At this point in time, most people are wanting to live close to the CBD, and if you live in the CBD, particularly young people are wanting to live in apartments.
\nKevin:<\/b>\u00a0 Yes. Then that factor has no doubt driven developers to go into a situation where we possibly do have an over-supply, particularly in those capital city areas. It\u2019s not unique just to Melbourne, because we also hear that there could be some over-supply in the Brisbane market, as well.
\nIt makes that selection criteria very important. If you are looking to buy a unit in, say, the inner ring of Melbourne, what would you be looking for specifically?
\nGreville:<\/b>\u00a0 There are a couple of things. The first thing that I always look for is scarcity. What I mean by scarcity is I\u2019m looking for an apartment that may be one of 15 or 20, a boutique development. That\u2019s probably the first box that I\u2019d like to tick.
\nThe second one, it has to have a relationship to a lifestyle element, whether that be a caf\u00e9 strip, transport, or a school. It has to have that relationship to that amenity. That\u2019s really important.
\nThe third thing is that it really must have a high underlying land value. If it\u2019s in a block of ten, we want it to be sitting on highly valuable land that might be worth $2000, $3000, or $4000 per square meter so that the apartment that you are buying will only share the value of that highly-valuable land with as few other people as possible.
\nKevin:<\/b>\u00a0 I guess the other issue, too, is if you\u2019re looking at an area where there already is a bit of an over-supply, it\u2019s important to know what\u2019s going to be coming up in the future in terms of the suburb zoning.
\nGreville:<\/b>\u00a0 Yes. Zoning is very important, and zoning in many capital cities around Australia has changed, particularly in Melbourne, so you need to be aware of those changes.
\nThe demand and supply equation is something that\u2019s been talked about a lot. Just recently \u2013 in the last few days \u2013 I\u2019ve heard that one of the biggest tower developments, 108 City Road, where there are 1105 apartments, 1000 of them have sold within the last two months. But I suspect that many of those are to overseas buyers.
\nKevin:<\/b>\u00a0 Is there anything other than the fact that they\u2019ve gone to overseas buyers that makes them unique, Greville, in your book?
\nGreville:<\/b>\u00a0 It is unique because that particular development is the tallest building in the southern hemisphere. But the other thing \u2013 and this is what I think many investors and buyers need to be aware of \u2013 is that that particular development does not complete until 2019. The question that I raise is, \u201cWhat is the market going to be like in 2019? Are you still going to get the same value that you have paid today?\u201d
\nKevin:<\/b>\u00a0 Yes. I guess that\u2019s a big question, too, that maybe some partners have come in on the basis because it\u2019s not going to be completed for such a long period of time, maybe they can punt it and make a profit out of it. But I would have thought those days had well and truly gone, Greville?
\nGreville:<\/b>\u00a0 Yes. I don\u2019t truly like to speculate when I buy real estate. To me, one of the best investment decisions that you can make is to buy those vintage apartments \u2013 the lower density, the Art Deco, the 1950s\/1960s\/1970s apartments. Some of those are the best investments that you\u2019ll ever make.
\nThe thing is they have a history of performance, so you\u2019re not speculating. You actually calculate capital growth in arrears over the last 20 to 30 years. The data is now available for you to do that, so there\u2019s no need to speculate when you\u2019re buying investment property<\/a> today.
\nKevin:<\/b>\u00a0 Greville Pabst, thanks for your time.
\nGreville:<\/b>\u00a0 Thanks, Kevin.<\/p>\n","protected":false},"excerpt":{"rendered":"

In today’s show we talk with\u00a0Greville Pabst, from\u00a0WBP Property Group,\u00a0one of the judges on\u00a0The Block, about a possibility of over-supply in the Melbourne market and how it will relates to the unit market. Transcript: Kevin:\u00a0 In the past, we\u2019ve talked a reasonable amount about a…<\/p>\n","protected":false},"author":176692471,"featured_media":4177,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[10,25],"tags":[90,101],"class_list":["post-4100","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-kevin-turner-sponsored-channels","category-sponsored-channels","tag-melbourne","tag-podcast"],"yoast_head":"\nHow oversupply of apartments in Melbourne makes area selection critical? - Realty Talk<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/channels.realty.com.au\/realtytalk\/how-oversupply-of-apartments-in-melbourne-makes-area-selection-critical\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How oversupply of apartments in Melbourne makes area selection critical? - Realty Talk\" \/>\n<meta property=\"og:description\" content=\"In today’s show we talk with\u00a0Greville Pabst, from\u00a0WBP Property Group,\u00a0one of the judges on\u00a0The Block, about a possibility of over-supply in the Melbourne market and how it will relates to the unit market. 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