The month in review: Melbourne
By Herron Todd White
The rapidly growing popularity of Footscray is being driven by revitalisation of local amenities, an increase in shops and restaurants, local council initiatives, affordability of property and significant volume residential developments. At only 6.5 kilometres from the Melbourne CBD, it is the combination of these changes and the proximity to the city that is attracting new residents at a fast pace. The culmination of all these elements is the shift in the perception of the suburb, as people discover the suburb has a rich culture and a lot to offer its residents.
With a massive 48% of the population in the 20 to 39 year old age bracket it is no surprise that the suburb is home to over 20,000 university students. The Maribyrnong Council has teamed up with Victoria University to work together on its ten year Footscray University Town Project. This is designed to make Footscray the capital of Victoria for university students and aims to transform Melbourne’s west through education. The benefits of such a project will see increases in student accommodation, public transport access and public events and activities. There will also be further improvements to footpaths, landscaping and green spaces and increased safety as a result of the combined effort project.
The suburb is being refreshed with Maribyrnong River improvement works due to be completed soon and the Nicholson Mall and Little Saigon redevelopments to begin shortly. Both the train station, which is a major public transport hub, and the community arts centre have undergone extensive redevelopment in the past five years and there are a number of projects and redevelopment projects in the planning stages. New shops, cafes and restaurants are opening as the population increases and the suburb embraces one of the very things many people believe to be a Melbourne staple – a vast selection of excellent food and coffee.
One of the other key reasons the area is seeing renewed popularity is due to the affordability of property. The current median house price for the December 2015 quarter was $765,000, a slight decrease from $780,000 in September 2015 and the median unit price was $366,667 which has remained steady since September 2015. This is the lowest median suburb price for both houses and apartments within a seven kilometre radius of the CBD. If the suburb’s record sale of a 6-bedroom period home in December 2015 for $2.11 million is anything to go by, there may be more period homes in Footscray set to reach high sale figures. The high rate of residential development is bringing more properties to the market and there is a mixture of period homes, redeveloped warehouses, modern townhouses and units for purchasers to snap up.
The development of high rises is set to skyrocket as projects such as 124-188 Ballarat Road, awaiting planning approval for 1,400 dwellings and Hopkins Landing, with 750 dwellings, having recently received approval. There are also a number of complexes currently under construction, including the Riverina with 970 dwellings, Botanica Banbury Village with 101 dwellings and 1 Warde Street with 380 dwellings. Then there is The Riverside, with 240 dwellings and The Buckley, with 100 dwellings, currently selling off the plan. These buildings are only a small portion of the residential developments occurring in Footscray. Along with a number of other inner Melbourne suburbs, there is a risk of over supply to the apartment market which may push prices down.
As the population of Melbourne continues to grow, the population of Footscray will follow and we expect more students to move to the area to enjoy the mixture of cultures and the beautiful open spaces.
Thornbury is a suburb that has quickly transformed itself over the past few years and has gained a huge amount of popularity amongst home owners, investors and the general public alike. The once classified working class suburb is now appealing to many people, but especially to the independent youth due to its proximity to the CBD, public transport, cafes and bars, parks and schools. Thornbury also appeals to many because it is a little less high density than some of its surrounding suburbs such as Fitzroy North and Northcote. As the suburb contains a lot of favourable services close by, it is attracting all types of people to the area, which in turn is pushing the property market further north.
In the past two years there has been a major increase in the median house price in Thornbury, further highlighting the gentrification taking place. The December 2015 median was $1,017,000, up 34% from $760,000 in December 2013.
A number of high priced sales have occurred in recent times. 42 Speight Street sold on 17 October 2015, and at the time, set a suburb house price record. The renovated residence once called an ugly duckling California bungalow sold for a speculated $1.8 million. It followed a number of high priced sales such as 4 Strettle Street, which sold for $1.75 million in April 2015 and 85 Gooch Street, which sold for $1.65 million in September 2015. Converted warehouses are also on trend at the moment and buyers are willing to pay big dollars for properties of this nature. The recent sale of 94A Harold Street is a prime example of gentrification. The 100 year old building, which had previously been a chocolate factory and more recently an animation studio, was sold in November 2015 for $920,000. The converted warehouse was designed to have a New York loft feel which most certainly resonated with buyers and resulted in its substantial sale price.
In the inner suburbs of Melbourne, Collingwood typifies the move from daggy to cool. From a heavy industrial background, the suburb is a desired location for trendy Melbourne residents. A major force behind the change has been the popular conversions of former warehouses and factories into townhouses and low-medium rise apartment buildings. The conversion of industrial buildings has been received relatively positively, as many of the buildings were in disrepair and have been improved significantly in the aesthetics department. There has been less positive reaction to the increasing amount of apartments along Smith Street, with heritage listed buildings being gutted and transformed into high volume apartment buildings.
Two recent examples of the redevelopment of old industrial or retail buildings are the Yorkshire Brewery development and Smith & Co. The Yorkshire Brewery complex has used the existing brewery buildings to create a new mini neighbourhood. Smith & Co consists of 238 apartments and was built on the site of the first Coles supermarket in Australia.
In five to ten years’ time, we believe that Smith Street will be bursting with low rise apartment buildings, as most of the ageing heritage listed buildings going up for sale will be purchased with the intention of putting as many apartments up as the Council will allow.
The surging popularity has led to an increase in the median house price from $555,500 in 2007 to $912,500 in 2015, while the median unit price went from $495,000 to $582,500 over the same time frame.
The inner south-eastern suburb of Elwood has transformed into one of Melbourne’s trendiest suburbs, and epitomises the current trend of gentrification. The area is popular amongst the younger Generation Y together with families who appreciate the café culture and beachside lifestyle, with tree lined streets, while being only a short distance from Melbourne’s CBD. Elwood also provides larger, family homes not typically found in neighbouring St Kilda. The area is also well serviced by a number of public transport options as well as being surrounded by a number of major roads.
The suburb comprises a mix of period detached and semi-detached housing of various ages and art deco apartments, in addition to a number of new apartment and townhouse developments. Many of the older dwellings have been updated with a small number of original style dwellings left within the suburb and those renovated or updated properties are re-selling well above their original purchase price.
The sale of 35 Shelley Street in Elwood demonstrates the popularity to reside in an updated dwelling within this trendy suburb. Its sale in December 2015 of $1,365,000 is a 28% jump from its previous sale of $1,065,000 in May 2013. The house is a circa 1935 Spanish mission style double brick dwelling situated on a relatively small 213 square metre block which had recent cosmetic, non-structural, renovations completed prior to its most recent sale. The works completed not only added significant value to the property but demonstrated the desire of residents to live within an updated period style dwelling within the popular suburb.
Capital growth in median house prices within Elwood jumped from 6.5% in 2014 to 19.3% in 2015 according to RP Data and the January 2016 median sale price also increased by an impressive 54% over a two year period from $1,227,500 to $1,902,500 thus demonstrating the popularity of the suburb.
Within the outer eastern suburbs, Ringwood and Ringwood East are perhaps the two main suburbs which have experienced noticeable movements towards gentrification. Both suburbs have seen property prices more than double over a ten year period. The creation of the Eastlink was certainly a key contributory factor to this change, but in more recent times property prices have been driven by overseas investment, the regeneration of Eastland shopping centre and the availability of highly reputable public and private schools.
Median property prices at December 2015 for Ringwood and Ringwood East now stand at $837,500 and $760,000 respectively. Maroondah Council’s own research (Maroondah 2040) revealed that the increasing income of individuals in these areas was resulting in increased gentrification. Neighbouring suburbs such as Croydon and Chirnside Park have seen considerable growth in property prices in recent years and with the development of new estates such as The Range and Cloverlea, could be considered to be in the early stages of gentrification by some.
In Ringwood, particularly concentrated around Eastland shopping centre, land banking has become more prominent. However, developers are now beginning to build on these sites. On Bourke Street, Ringwood for example, there are currently four sites under construction, all of which will yield residential dwellings. This trend is expected to continue with the number of dual occupancies and low to midrise apartment blocks continuing to be favoured by developers.