Sales turnover trajectory has continued its upward momentum. Activity levels across the Melbourne Industrial market have shown considerable uptick for the 2017 calendar year after two years of limited investment. High demand for properties coupled with a shortage of available stock kept turnover levels subdued in 2015 and 2016, however improvements in these stock levels has also resulted in strong capital value growth. The broader strong fundamentals of Melbourne including robust population improvements and strong employment growth have all resulted in high market confidence which has fuelled this growing interest in commercial assets.
Locally in the Kingston LGA interest in the industrial market has come from both private investors and owner occupiers during this time where interest rates have been at long term lows. While some funding hurdles have emerged, investment yields have continued to drive down to the sub 5.00% range for some assets. The sub $1.5million price point has been the most active and has witnessed sizeable capital value growth in all analysed suburbs, while the strong reduction in days on market highlights this active, ongoing demand for quality investment stock over the past 12 months.
The Kingston LGA witnessed a strong increase in sales turnover during 2017 as greater stock made its way to the market after a subdued two year period where stock remained tightly held. During the 2017 calendar year, sales volumes reached $160.99million well ahead of the 2015 and 2016 calendar years result of $83.63million and $86.35million respectively. In the first three months of 2018, sales have only reached $20.31million.
With no large landmark sales, transactions have been dominated by sub $1million assets. Reluctance may have lifted by owners who were unsure whether to put their property on the market, aided by the recent high demand and lowering yields. Financing however has become
slightly more difficult for many investors who a year ago were actively pursuing assets. This may put a dampener on volumes for 2018. Smaller assets continue to dominate this region with average prices over the last 12 months reaching $1.847million yet, discounting the couple of over $20million sales during this period, the average falls to just $1.103million which is a strong