The Smartline Report – September Edition

The month in review: Melbourne

By Herron Todd White
September 2016

Within the Melbourne property market, the concept of a traditional property type is diverse between suburbs and in some cases even between streets. No one particular style of dwelling is predominant within the more established suburbs. Many of these suburbs continue to undergo changes which result in an evolution of properties that make up the identity of a particular area.

Inner Eastern Suburbs
Melbourne’s inner eastern suburbs have seen significant changes to their property landscapes over the past ten years. Suburbs that lie within the Boroondara municipality, particularly Balwyn and Balwyn North, have seen a large number of existing 1950s older style dwellings being demolished to make way for brand new two and three level French Provincial or Neo-Georgian style executive residences.

A prime example is 211 Belmore Road in Balwyn North. The original dwelling built in 1954 was purchased in January 2014 for $1.25 million and subsequently demolished to make way for a French Provincial style dwelling which is currently listed for sale accepting offers above $3 million.

This change in landscape has been heavily influenced by Asian buyers looking to move into the coveted Balwyn High School zone, favouring newly constructed dwellings of this design and therefore willing to pay a premium price to move into the area. According to local agents, 15% to 20% of the region has been rebuilt over the past ten years, with that figure expected to rise over the coming decade. This is demonstrated by the fact that Boroondara City Council was the second highest local government authority in the state for building approvals in
2015 with over $1.2 billion worth of construction approved, second only behind City of Melbourne which approved $4.16 billion linked to high rise construction.

While a recent crackdown by banks on foreign investment has seen a dip in property prices for the region over the past six months, the heavy influence of Asian buyers in the area is expected to remain.

Inner City Fringe
The inner city suburbs of Melbourne are home to some iconic period homes. These period homes would be considered the traditional property type within the inner city fringe. Classic Late Victorian terraces (1875-1901), Edwardian town residencies (1901-1918) and California Bungalows (1913-1945) spread over the suburbs can be used as a measuring stick of when the suburb began to be built up.

Closer to the city we see mostly Victorians whereas as we move further out, Edwardians become more prominent and further out again we find the Californian Bungalows. These properties have remained in demand due to the period appeal, high ceilings, solid nature of construction and proximity to the city, appealing to both  owner occupiers and investors. The current trend for these property types is to demolish the back half of the house and add a modern extension.

A good example of a Victorian Terrace with a modern renovation is 24 Lee Street in Carlton North, which sold for $1.88 million in February 2016. The internal renovation has been completed with the overview of an architect paired with the timeless period appeal of the exterior.

Similar to the inner eastern and northern suburbs, a process of change is occurring, however this is coupled with the increasing number of apartments hitting the market. Suburbs such as Carlton, Collingwood, St Kilda, Richmond, Abbotsford and South Yarra have seen increasing amounts of apartment supply as developers snap up any available land with suitable zoning requirements. With large developments nearing completion, including Smith & Co in Collingwood, Jaques in Richmond and Playhouse in Abbotsford, there is the potential for a shift in the idea of a traditional property type within the inner city.

Western suburbs
In the western suburbs of Melbourne, Williamstown is considered a suburb with a distinctive style. Williamstown has a rich history. It is situated on the bay and was once a maritime hub. The predominant style of dwelling close to the waterfront at the mouth of the Yarra River is that of period Victorian style. However, moving further inland the dwelling style changes to newly constructed apartments and dwellings and mid-century dwellings.

Williamstown was the original site for the Capital of Victoria prior to moving up river to the current CBD site.

As shown by the graphs below, even though units are becoming popular, houses continue to make up most of the sales in Williamstown.

The July median house sale price was $1,117,500 and the July median unit sale price was $633,750 (RP Data). These median sale prices are considerably higher than the Hobsons Bay Local Government Area which was $795,000 for houses and $426,000, illustrating just how popular Williamstown has become and the premium paid to live there.

Outer West
Residential development in Melbourne’s outer west commenced in the 1970s when Seaholme, Werribee and Melton began to emerge. However, it wasn’t until the late 1990s and early 2000s when development began in earnest. Newer suburbs such as Tarneit, Truganina, Point Cook, Wyndham Vale and Williams Landing have expanded rapidly since then. These suburbs form the Wyndham municipality which is growing by an estimated 10,000 people per year and 50,000 since 2011 (Source: Wyndham City, June 2016). Point Cook for example is now home to many established and aspirational estates such as Sanctuary Lakes and Alamanda. The suburb
continues to develop with Upper Point Cook, a 125 hectare tract west of the Princes Highway, in various stages of release and completion.

Typical dwelling types across the Wyndham municipality are as found elsewhere – modern single or two level, part rendered, brick veneer pitched concrete roof tiled properties with a single, or more commonly, a double garage. Site sizes are typically between 350 and 500 square metres with a single detached dwelling that runs close to boundary lines. This construction style and floor plan has remained more or less constant, while there have been some changes in the facades and materials used.

Smaller sites and townhouse developments are becoming increasingly evident in the City of Wyndham. In Point Cook, where land values and building contract prices are typically higher than other suburbs in Wyndham, a recently completed medium density 18 unit town house development (Saratoga) has proved successful. The second release of 55 units is now under construction. These new 3- and 4-bedroom townhouses are priced from $435,000 creating an affordable and attractive proposition for prospective purchasers.

By way of contrast, over in Wyndham Vale, a 2016, 4-bedroom, 2-bathroom home on a site of 526 square metres sold in April 2016 for $440,000. Estate guidelines issued by developers aim to control the overall design of estates in the City of Wyndham and such aspects as setbacks, materials, colours, driveways, front landscaping, antennas, solar panels, fencing and garage doors. All dwellings must also adhere to the Wyndham Planning Scheme. As a result some suburbs and estates within these suburbs do have a slightly different look and feel.

The median house price in the Wyndham – Melton area was $377,000 in January 2016 which is a rise of 4.9% over the previous 12 months (Source: Core Logic 2016). While rising, the affordability of Melbourne’s outer west is underlined when this median is compared against Boroondara which showed a median of $1,939,000 (Source: Core Logic 2016).

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