Melbourne’s residential property market has been performing well in 2015. There have been strong levels of growth throughout Melbourne especially within the inner city suburbs. This can be attributed to many factors such as a record low cash rate of 2% and high levels of foreign investment. This is giving the Melbourne market a positive outlook and affordability is a growing issue. Many buyers are being priced out and are forced to buy in outer suburbs. Dwellings in most inner city suburbs are over $500,000, so we have looked at what can be purchased at this price point.
Once a working class suburb, North Melbourne has transformed into a lively suburb with a vibrant café culture. In addition to the walkable distance to the CBD, the suburb is well serviced by North/West Melbourne train stations, three tram routes and buses. Errol Street and Victoria Street are famous for the variety of shops, cafes and restaurants. In recent years, a large number of old factories and warehouses have been converted to modern apartments. The suburb is highly sought after by young professionals and students owing to its close proximity to the CBD, Victoria Market, hospital precinct and universities. 65% of the population is currently renting with a vacancy rate of 2.95%. The median price for units is $493,000 as of May 2015. 2-bedroom apartments in older complexes are generally available at the higher end of the $400,000 mark.
Bundoora is a northern suburb approximately 16 kilometres from the Melbourne CBD, and is home to RMIT and La Trove University with a demographic mix of students and families. When looking back to July 2014, it was reported that the median house price for a 3-bedroom home was $495,000. In March 2015, statistics indicate that Bundoora’s median house price for a 3-bedroom home grew to $513,000 (http://www.reiv.com.au/Property-Research/Median- Prices/Median-prices-by-bedroom/3-bedroomhouses).
When looking at the overall median house price Bundoora recorded an average house price of $587,500.
The median land price for Bundoora was recorded at $717,500 for May 2015.
This indicates that $500,000 will no longer be sufficient for buyers to purchase houses or adequate size land in this suburb and will force buyers to purchase apartments. The median apartment price recorded in May 2015 was $361,000, a large drop from April which was $455,000 and this median price drop is believed to have occurred from the oversupply of apartment developments in the area.
We have seen continual demand within the new house and land markets in the outer south-western region of Melbourne with areas such as Point Cook, Truganina, Tarneit and Williams Landing having had continual demand over the 2014/2015 period. Appeal for these markets is being driven by the relatively affordable entry level properties with buyers still being able to purchase three to four bedroom homes for under $500,000. RP Data Core Logic has reported an annual capital growth of 3.23% for the year so far, reflecting a new median house price of $465,000. Although Point Cook is situated approximately 22 kilometres from Melbourne’s CBD, nearby railway stations such as Aircraft and Laverton on the Werribee line provide access to Point Cook’s town centre as well as Melbourne City. Two of the more prominent estates within Point Cook (Alamanda and Sanctuary Lakes) have seen dwellings consisting of four bedrooms and two bathrooms situated on roughly 450 square metres of land sell from $450,000 to $550,000 depending on their street appeal and location. These sales reflect the strength within the current market and the desire to be a part of these established estates.
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