Quality apartments remain in demand throughout Melbourne despite broader market challenges in that city, the head of a leading development firms says.
Speaking at a topping out ceremony for her company’s 43-storey Voyager luxury apartment complex on the southern bank of Melbourne’s Yarra River last Thursday, Mirvac chief executive officer and managing director Susan Lloyd-Hurwitz said demand remained strong for quality apartment offerings.
“The success of Voyager, as well as our recently completed Apartments of Tullamore buildings, has given us confidence in ongoing demand for quality, well located apartments in Melbourne supported by valued amenity …,” Lloyd-Hurwitz said.
Set to rise 130 meters above the ground and reach 45 storeys, the new tower comprises 315 apartments along the southern banks of the Yarra River within the group’s Yarra Edge Community just south-west of the Melbourne CBD.
Its offering includes artist and home office apartments, one, two and three-bedroom luxury residences, sky-residences and the first exclusive residents-only rooftop space in the Yarra Edge precinct.
The complex is currently more than 75 per cent sold, with a limited number of apartments remaining in one, two- and three-bedroom designs.
The first residents are expected to move into their new apartments in spring.
For Mirvac, the complex is the latest addition to a $1.4 billion pipeline of apartments.
Aside from Voyager, this includes 129 recently settled and sold-out apartments in Phoenix at Apartments of Tullamore in Doncaster; more than 95 per cent of apartments sold in the soon to be completed Folia, also at Tullamore; and The Eastbourne’s luxury residences in East Melbourne, completed in mid-2019.
The comments come amid broader challenges in Melbourne’s inner-city apartment market.
Last month, Victorian Treasurer Tim Pallas declared that he was concerned about Melbourne’s inner city apartment market as vacancies rose to 11.8 percent in January.
Even prior to COVID, the market had been challenged to absorb an enormous volume of new stock following several years of record construction activity.
Across the City of Melbourne local government area, 5,484 and 6,413 new dwellings were completed in 2019 and 2020 respectively, according to an open-source development monitor maintained by the city.
This compares with an annual average of 3,647 completions over the nineteen years to 2020 or just 2,610 completions prior to the recent construction boom in the thirteen years spanning 2002 until 2014.
All this has put pressure on apartment prices, which in the Melbourne CBD have recovered over the past two years but remain below levels seen at their peak throughout 2014 and 2015.
Since COVID hit, there have been concerns about the level of demand for inner-city apartments as immigration has ground to a halt and preferences have shifted back toward lower-density living with greater space.
Despite this, Lloyd-Hurwitz says there is a desire for quality residences and amenities in inner-city locations which are well connected.
In the case of Voyager, she said the most common demographic has been owner-occupiers.
Demand has been strong from both downsizers who are seeking a lifestyle solution along with experienced apartment dwellers who wish to upgrade their home and lifestyle.
“Recently, we have also seen astute investors looking to secure their future by purchasing an apartment to rent now and move into in the medium to long term,” she added.
For developers to thrive through COVID, Lloyd-Hurwitz says there is a need to listen to an learn from customers and to deliver a range of living options with a focus on flexibility, liveability and sustainability.
She added that the complex remains on schedule despite the disruption created by restrictions associated with Victoria’s second wave of COVID-19 last year.
These saw building sites limited to 25 percent of their baseline workforce over several months.
Speaking of Mirvac, Lloyd-Hurwitz says the company’s integrated model through which it has ‘end-to-end’ in-house capability has helped to achieve this by delivering greater power over quality control, project flexibility and timing.
The topping out ceremony was attended by Victorian Planning Minister Richard Wynn as well as Development Victoria CEO Angela Skandarajah.
Following the topping out at Voyager, Mirvac is now generating visioning discussions for its next tower at Yarra’s Edge subject to market conditions.
A proposed 1,000-square-metre retail hub is also in planning for the precinct, which is anticipated to service both the local community and the broader Fishermans Bend and Docklands catchment area.
Meanwhile, the company is working towards announcing new city fringe and middle ring apartment developments over the coming months.