Values slump in Melbourne’s Docklands
Rising interest rates and oversupply have hit the Melbourne apartment market, with the Docklands precinct the worst affected. Many investors who purchased units off the plan will be forced to forfeit their deposits and others will be left servicing loans much higher than the values of the properties. The slump hit Melbourne's overall auction market over the weekend with only half of the properties auctioned being sold. Mortgage House of Australia said that in one particular Docklands building owners with sea-view apartments face a 10-15 per cent decline. Those with inland views face a 15 per cent fall. Mortgage brokers are concerned that investors who have yet to settle on their properties will not be able to find finance as banks and other lenders tighten lending criteria. AMP economist Shane Oliver said many people have fallen for the myth that property prices only ever rise. He expects values to drop 5-20 per cent with apartments the worst hit.