The biggest commercial construction boom in Melbourne for more than two decades will create the climate for the shift in capital city market focus. By contrast Sydney is facing a contraction in its market with office space being withdrawn to make way for the Metro Rail project. Towers are also being converted to other uses, including residential and hotels. Melbourne's impending office supply boom, however, is expected to favour tenants, pushing vacancy rates in the city centre to a 20-year high of 10.7 per cent by 2020, according to research by Investa, one of Australia's largest property groups.
Sydney and Melbourne's sizzling housing markets stepped up the pressure on buyers last week as both cities recorded auction clearance rates of more than 80 per cent. The stronger figures, driven in part by a Melbourne auction market down by almost 500 properties from last week, pulled the preliminary national auction clearance rate up to 78.1 per cent from 74.5 per cent a week earlier, CoreLogic figures showed.
New figures from SQM Research show that while the national vacancy rate held steady at 2.4% in February, vacancy rates in several capital cities have seen a decline.
Australian property prices continued their surge higher in March despite the threat of rising interest rates and recent rampant appreciation. Preliminary numbers from CoreLogic show an approximate 1.4 per cent advance in capital city dwelling values in the month, suggesting the housing affordability debate could step up a notch when the final numbers are released on Monday.
