Melbourne’s property market showed mixed results in the June quarter where more affluent suburbs close to the city experiencing massive price drops whilst more affordable second-tier and city fringe suburbs recording strong growth.
The Valuer-General’s data is derived from compulsory sale notices and is therefore the most accurate available. It can differ significantly from other data sources provided by property analysts because it takes longer to compile and is released in a less timely fashion. The latest snapshot from the Valuer-General shows the following:
Price falls in inner city areas (June 2010 quarter):
- Middle Park – median value fell 39% from $1,910,000 to $1,170,000
- South Yarra – median value fell 32% from 1,920,000 to $1,300,000
Price rises in city fringe suburbs (June 2010 quarter):
- Heidelberg West – median value increased 32% from $420,000 to $555,000
- Melton South – median value increased 7% from $255,000 to $273,000
In this regime of upward pressure on interest rates, I believe affordability will be key and I foresee the rise of more affordable suburbs within Melbourne’s city fringe in 2011 as first home buyers and investors alike start to search for even better value. The reality is that most people aspire to live in inner city areas but can ill-afford these locations as prices have surged over the last 18 months. The higher end suburbs in cities like Sydney, Melbourne and Perth are experiencing decreases in value due to the lack of demand whilst second-tier suburbs with good transport links, public amenities such as schools, universities, hospitals, shopping malls and commercial centres are proving to be more popular to a wider range of buyers as these locations are a lot more affordable.
The three reports above identify locations which ticks all the boxes for transport links, public amenities, strong capital growth history, gentrification and potential upward price pressures as well as strong investment yields.
The article above are excerpts from House prices slump near city, The Age, 2 December 2010
- Land prices surge in Melbourne’s outer areas, The Age, 10 November 2010
- Northern seachange city loses to Melbourne’s west
- Melbourne’s Western edge now Australia’s fastest growing region, KPMG report, 7 September 2010