According to BIS Shrapnel MD, Robert Mellor, there is no sign of property oversupply in Victoria despite the higher numbers of new property developments. While some suburbs may appear to have an extensive level of develpment and a lower level of property clearance, overall the state is in a good shape.
Melbourne still has strong underlying demand and solid population growth, the Melbourne market will be able to sustain the boom in development for the next two to three years,” Mr Mellor said.
The numbers of new constructions of dwellings have gone up by 30 per cent in 2009/10 to 54,500 starts – Victoria’s highest level of construction to date.
Private and other dwelling commencements also increased in 2009/10, growing 43 per cent.
Relatively low land prices were the driving factor behind Victoria’s recent residential development boom.
Property clearance rates are currently down all across Australia as well as in Melbourne.
Potential purchasers are holding back due to uncertainty in relation to interest rate and many are simply not able to meet the currently stringent home loans qualification criteria.