HTW’s Theme for the month for October – Smokin’ hot price points….
Here are some of the highlights from the REVIEW
Lower entry level (Melton) Melton is approximately 35 kilometres west of the Melbourne Central Business District (CBD) and is serviced by a train line that runs to and from the CBD. The suburb is experiencing a significant demand for affordable entry level housing which has driven some growth. Affordability for first home buyers, young families and couples and the attractive record low interest rates are the main drivers in the area for sales of new land and house and land packages by developers.
Melton city’s population growth rate is predicted to be the second fastest growing in Victoria. Demographic research shows that the area is dominated by young families with over 70% of residents being aged less than 45 years old.
In the foreseeable future, Melton’s residential property market is expected to experience growth. This growth appears to be driven by an increase in the area’s population of potential buyers that priced out of the inner suburban Melbourne market and the low interest rates.
According recent Real Estate Institute of Victoria research, the median house price within Melton was $255,000 in June 2015. Below demonstrates a capital gain made possible due to a market movement.
164 Coburns Road, Melton 3-bedroom, 1-bathroom, 112 square metre floor area (no improvements between sale dates). Sold 13 June 2015 for $260,000 Sold 3 April 2014 for $215,000.
Ringwood is an established metropolitan suburb approximately 24 kilometres east of the Melbourne CBD. It consists of a mixture of established residential dwellings on traditional sized residential allotments generally built during the 1950s, 1960s and 1970s. We note that in more recent times, low and medium density unit development is taking place, particularly on the larger allotments and those close to Ringwood central. The area is well serviced by schools, shopping, parks, sports fields, walkways, arterial road access and public transport. The suburb is generally considered to be a mid socio-economic area. A feature of the suburb is the Eastland Regional Shopping Centre and close proximity to Eastlink providing direct access to the Melbourne CBD. The $700,000 to $1 million price sector seems to be running hottest in the Ringwood market for housing at the moment.
Below are some examples of what you can secure in Ringwood within different price brackets. Less than $500,000 will secure a single level conventional style dated brick 1- or 2-bedroom, 1-bathroom unit. $600,000 to $650,000 will secure a single level conventional style circa 1970 albeit fully renovated brick or weatherboard 2- to 3-bedroom, 1-bathroom dwelling on circa 600 to 800 square metres of land. (For example, recent sales include 14 Glencairn Avenue, Ringwood for $600,000 and 3 Margaret Street, Ringwood for $625,000.) Circa $700,000 will secure a single level conventional style original, unrenovated brick or weatherboard 2- or 3-bedroom, 1-bathroom dwelling on circa 700 square metres of land near Eastland Regional Shopping Centre. (For example, 11 Prospect Court, Ringwood sold for $737,000.)
Around $800,000 will secure a two-storey conventional style 1970s albeit fully renovated brick or weatherboard 4-bedroom, 2-bathroom dwelling on circa 590 square metres of land near Eastland Regional Shopping Centre (for example, 16 Prospect Court, Ringwood sold for $810,000).
There are a few factors driving these markets and price points at the moment including:
– Substantial upgrade in nearby infrastructure (i.e. Eastlink, Eastland Regional Shopping Centre, Ringwood Train Station and Bus Terminal);
– Historically low interest rate environment;
– Melbourne’s increasing population; – Substantial foreign investment/purchasing;
– Competition from potential purchasers priced out of adjoining suburbs.
Demand for property in Ringwood can be expected to cause an increase in overall property values for surrounding suburbs in the outer eastern housing market as property prices have increased substantially and buyers are pushed further out.
It is unknown whether the strong performance in Ringwood and its immediate surrounding areas will be sustainable over the coming year.
Recently in the city of Boroondara, new neighbourhood residential zoning has been introduced in accordance with the Neighbourhood Character Study undertaken by the Council. The new zoning restricts subdivision to land over 500 square metres (or 300 metres for NRZ2) and allows a maximum of two dwellings on a lot. The new zoning also restricts the maximum height for dwellings to eight metres.
Median house prices in Balwyn have risen 33% in the past five years due to high demand from foreign investors and also the desire to be in the popular Balwyn High School zone (Source: CoreLogic RP Data). The main price drivers in Balwyn, Balwyn North and Canterbury are:
– School zones, especially Balwyn High School zone
– Close to a number of public transport options
– Chinese and other foreign investors. The Victorian State Revenue Office introduced a 3% duty payable by foreign investors which came into effect on 1 July 2015. The duty has had no discernible impact on foreign investment.
– Record low interest rates
The future of house prices in Balwyn appears to be unsustainable. Limited supply has resulted in overpriced housing and foreign investment will be curbed in the future, which could cause the market to stall. In the foreseeable future, the Balwyn, Balwyn North and Canterbury prestige residential markets however look likely to remain heated for the next 12 months.
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