The unit market has fluctuated markedly over the past five years particularly in the new unit sales category driven by new unit releases, along with the clear out of distressed developer stock. Another factor to impact the unit market over the past years has been the impact of escalating body corporate fees. Our current assessment of the unit market is that it remains relatively flat overall at a combined total of around 50 to 60 new and established unit sales per month.
The median established unit price has dipped since early 2011 following escalating body corporate insurance fees along with low demand particularly in the established unit market. Affordability concerns continue to dominate the market, however over recent months anecdotal evidence indicates that the established unit market has now reached a price point that is again becoming attractive to owner occupiers and investors alike. The median established unit trend price came in at $257,000 in June 2015, up on the $249,000 median price trend recorded in June 2014. Meanwhile for a new unit, the median trend price came in at $307,000 in June 2015, which is similar to that recorded in June 2014.
In the new unit market larger developments have shown a distinct shift in size, configuration and amenity offered over the past five years, which has made them predominantly suited and targeted to investors. Due to strong construction costs, developers chose to reduce the size and scope of their product to meet a price point. Over the past five years we have seen an increasing number of 1-bedroom units and fewer 3-bedroom units being offered by developers along with units having reduced main living areas with the focus being driven by price points.
Our unit survey as at the June quarter indicates a supply of 84 new developer units available for purchase. Current supply consists of three new units available in the CBD and 81 in suburban developments (within developments of 20 or more units).
Over the past 12 months there has been a distinct lull in new unit developments commencing construction. We have seen throughout the first half of 2015 a slight shift in activity by developers with anecdotal evidence suggesting perhaps we are seeing a refocus on the local market.
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