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Affordable Homes? Yes, They Are out There
November 13, 2014
Price Growth Plateau Good News for Home Buyers
Price growth in Melbourne’s buoyant property market has begun to plateau – good news for those looking to get a foothold on the property ladder at a time of booming auction numbers and big price increases in some suburbs.
REIV’s latest median house prices show that, at September 30, Melbourne’s median price remained at $649,000, as it had been at June 30. But in some of the most sought-after suburbs, particularly those in demand from buyers priced out of their first choice areas, it’s a different story.
Affordable Homes? Yes, They Are out There.
That’s not to say there aren’t bargains out there. We identified seven suburbs in which the median price was $350,000 or less – and as the median is the midpoint of all sales in that area for the quarter, that means there were a substantial number of properties below that price.
Melton West is Melbourne’s most affordable suburb – it was in June and it still is. Back then, its median house price was $270,000, whereas by the end of September it had risen to $290,000, an increase of 3.6 per cent. That’s good news for those who bought in West Melton in recent months – they have now added to their equity. It also illustrates why those thinking of buying should not delay.
Second most affordable was Wyndham Vale with a median house price of $330,000. Others included Deer Park, Hoppers Crossing, Truganina and Pakenham.
Some of the city’s most affordable homes are in suburbs with good transport links such as Werribee, where the median house price is just $335,000, or St Albans, where the median is $365,500. Both suburbs have excellent shopping and train links to the CBD, yet their median prices are almost half the overall Melbourne median.
On Millionaires Row
At the other end of the market, Melbourne had 56 suburbs with the median house price of more than $1 million. That was up from 52 such suburbs in the June quarter. Top of the list yet again was Toorak, Melbourne’s priciest suburb, with a median of $2,850,000.
No surprises that Brighton, with a median house price of $1,802,500, was the city’s second most expensive suburb. Balwyn, Kew, Camberwell and Balwyn North were also on the list. New entrants to the million dollar club were Moonee Ponds, Glen Waverley, Murumbeena, Templestowe and Doncaster.
Some of the suburbs which now belong to the million dollar club were once working class Melbourne suburbs. Their early residents would have been stunned to hear that their homes in Carlton, Fitzroy and Port Melbourne would one day command prices of more than $1 million.
The Ripple Effect.
It’s interesting that among the suburbs which commanded some of the highest growth for the September quarter are a number benefiting from what those in the property business called the ripple effect: that is, when sought-after suburbs experience strong price growth some buyers find them difficult to afford within their budget. So they look to nearby suburbs offering similar advantages such as good shopping and transport links.
Coburg, with a median price of $828,750 for the three months to September 30, had the highest capital growth in Melbourne during the quarter, with 16.8 per cent. Balwyn recorded 16.3 per cent growth, with a $1,761,500 median. And Caulfield South had the third-highest growth with14.4 per cent and a $1,170,000 median.
Other suburbs recording strong growth in the quarter included Noble Park (14.3 per cent), Mount Waverley (12.5 per cent) and Doncaster (11.9 per cent). Also on the list were South Morang, Box Hill North, Seaford, Wantirna South, Forest Hill and Craigieburn.
Behind each of the entries on this list lies a property story: affordability issues, growing demand for outer suburban property, sought-after school zones. Each is there for a reason, but only research will reveal those reasons to the canny buyer. Begin with your online search, look up the median price for the area and then go and see it – check out not just the house but the neighbourhood.
By Enzo Raimondo
Chief Executive Officer, REIV
About the author: Chief Executive Officer since 2000, Enzo Raimondo is the dynamic force behind – and the public face of – the REIV. He is a regular commentator in the media, within the industry and to the wider community.