This article was first published on www.afr.com by Michael Bleby May 11 2016 at 9:23 AM
Melbourne still offers buyers affordable homes within 20km of the city centre, despite the past few years of strong price growth, research from PRD Nationwide says.
Fawkner in the north, Heidelberg Heights in the northeast and Sunshine West on greater Melbourne’s western side are three suburbs with house prices within reach of the CBD with houses that are in reach of the buyers taking out the average Victorian loan of $405,048, the real estate agency’s latest Melbourne Hotspots report says.
Median house prices range from $460,000 to $653,000 despite growth over the past 15 month as much as 8.2 per cent, the report shows.
For apartment buyers, other suburbs have median prices that are also accessible for home buyers, such as Glen Huntly ($472,000) and Oakleigh ($573,000).
Like suburbs identified in the agency’s separate Brisbane report, PRD Nationwide has not singled out the suburbs with the highest previous or likely rates of growth, but ones that are performing well with low vacancy rates and are accessible to first-home buyers, with a price close to the average mortgage figure for the state, rather than for the capital.
The value of these particular suburbs is not a result so much of new infrastructure bringing value to new areas, but the gentrification of older areas that have existing transport and other facilities.
“Most of the areas chosen already have built in traditional infrastructure to ensure connectivity to Melbourne CBD for the current work and play purposes,” said PRD Nationwide’s national research manager Asti Mardiasmo.
“It’s more due to the gentrification of these areas from a fresher/higher quality/new look stock and increasing commercial development.”
When it comes to suburbs closer to the city than the Tullamarine airport, Sunshine West, with the cheapest house prices at $460,000 has been designated as an employment and innovation cluster and has about $30.5 million-worth of new projects commencing this year. The other suburbs range from the city’s north around to the southeast.
None is benefiting from large-scale infrastructure projects.
“There are a few traditional infrastructure such as roadworks and public transport upgrade (buses in particular) but they are not multi-million dollar projects and the residential/commercial sector definitely outweighs the infrastructure,” Dr Mardiasmo said.
In keeping with the population growth that sees greater Melbourne growing by about 100,000 people a year, rents are also rising.
“The Melbourne rental market has shown positive growth in median house and unit pricing over the 12 months to December 2015,” the report says.
“In Q4 2015, three-bedroom houses and two-bedroom units recorded 4.2 per cent and 2.7 per cent annual growth respectively. This reflects a strong level of demand in the Melbourne rental market.”