Wealthy downsizers have driven $100 million of apartment sales in just 11 weeks across the latest residential stage at Melbourne's Moonee Valley Racetrack - defying the tough conditions being experienced by many developers in the off-the-plan market.
"Those stats are definitely an outlier. It's a very challenging market for developers", said Paul Hameister, executive chairman of Hamton Property Group, which is undertaking the $2billion project in partnership with industry superfund HostPlus and the Moonee Valley Racing Club.
He attributed the latest sales success to the project's great location and views, amenity and lack of apartment choice for thse downsizing or rightsizing out of their family homes.
"We made a very deliberate decision of offer high-end quality apartments to the local inner-north affluent downsizer market," Mr Hameister The Australian Financial Review.
"A lot of the buyers had sold very large homes in nearby suburbs like Essendon, so we had a lot of cash buyers not affected by interest rates."
Other developers , such as the Pitard Group, have declared the off-the-plan apartment market "dead" and instead started building their apartment projects first before commencing sales in an effort to reassure buyers that the project will be delivered.
But Hamton has defined this trend, achieving $100 million in pre-sales with its second apartment building - 11-storey Trackside House - to be delivered at the 40ha estate.
Once completed, Moonee Valley Park is expected to include about 2000 dwellings, a retail village, 20ha of parklands and other amenities.
As its name suggests, Trackside House will be build next to the racetrack, giving about half of the 205 apartment occupiers views down the finishing straight from the comfort of their balconies or living rooms.
Mr Hameister said many of the buyers had existing connections to the racing club, which hosts events like the Cox Plate in October.
Combined with a second building, Stonepine House, which is 80 per cent sold, the two towers will house 324 apartments and share a common basement.
Construction has already kicked off, with builder Icon appointed to deliver the $320 million project.
Since launching Moonee Valley Park in August 2019, Hamton has delivered two completed residential stages of townhouses and apartments as well as a restaurant and bar.
The developer is also working on plans to transform the University of Melbourne's former Hawthorn campus into 300 apartments with an end value of about $400 million (after acquiring the 1.62ha site for about $40 million in March last year) and is the development partner of the North Melbourne Football Club.
While achieving success at Moonee Valley, Mr Hameister said challenges faced by other developers would provide "good [site] buying opportunities in the market".
"Some sites no longer stack up [for other developers] and interest rates are now too high [for the developers] to hold them. This should shake out a few sites." he said.
Having previously competed with offshore developers, especially from China, for sites, Mr Hameister said Hamton's main competitors were now build-to-rent developers.
Article written by Larry Schlesinger for The Australian Financial Review