March’s last super Saturday is done and with the Real Estate Institute’s 75% auction clearance rate we can see that property price growth is far from done. There will now be a couple of weeks before the auction market picks up a little, with Easter next weekend, and with school holidays straight after there could be a 3 week lull for family homes, which some vendors having a preference for not selling whilst the children are home from school!!
Everything in the news and on talk back radio this week is travel times from the outer suburbs. Especially from the West. Point Cook, Werribee and further from Geelong have had travel times doubled and even tripled and this will be the case for the next 18 months or so whilst there are roadworks to widen the Bolte Bridge through to the Domain tunnel. But for a full extent of the difficulties associated with driving up the Geelong road we need to think about getting to the freeway as well. Some people in Sanctuary lakes / Point Cook are saying it can take 45 minutes just to get to the freeway. AND THEY HAVE NO OTHER OPTIONS. One accident on the Geelong Freeway and the whole area is devastated for hours
With this in mind, I can see many people looking further north towards Sunshine, Albion, St Albans, and then further around towards Glenroy and Oak Park. These suburbs have good train and tram links to the city as well as multiple ways to drive to the city. They can swing down the ring road to the Westgate freeway or swing North towards the Tullamarine freeway and once the extra lanes are in place, will have a much better trip than their fellow commuters from the South West.
The areas in the Middle West Ring of Melbourne will be some of the best stand out performance suburbs over the next decade. With subdividable land from $700k in Sunshine to $500k in St Albans, there will be a flow on to new affordable townhouses over the next ten years. With small young families tending to opt for townhouses rather than larger house on land, both for ease of maintenance and also lower initial prices, the building boom in the Middle West should continue strongly over the next 5 – 10 years.
Oak Park and Glenroy will also appreciate a boom in townhouse growth over the same period. Areas here are only 15 minutes out of the CBD outside peak hour and only 45 minutes during peak, this will become a favoured area for dual income professionals working in the CBD. Big townhouses of 3 bed 2 bath and double garage from $600k in Oak Park to $500k in Glenroy will be very attractive indeed.
This will mean we will see land component sales skyrocket in these areas as developers target development sites of 2 -4 townhouses. Land banking will follow on from suburbs like Chelsea and Seaford in the South East, Glen Waverley and Mt Waverley in the East and Preston, Heidelberg in the North East, where land sites have more than doubled in value over the past seven years, even though many areas of Melbourne have only doubled over the past decade.
Whilst apartments may well slow their growth through the next decade, solely due to oversupply, I think that townhouse and larger houses on small land will have the biggest general growth as they are quickly becoming the property type of choice for many purchasers trying to remain within striking distance of the CBD. For those that cannot afford the prices above $500k and for those who don’t have to get into the CBD, the outer Eastern “new Estate” suburbs that are very well fitted out with infrastructure will be the hardest places to buy in. Suburbs like Pakenham, Clyde, Cranbourne West, Lyndhurst, Skye and Langwarrin in the South East are attracting huge amounts of first home buyers. The houses are relatively new, there are fantastic parks and gardens and also shopping centres within walking distances of most homes. The new schools are being built and the train line, which is currently the busiest in Melbourne, has had substantial signalling upgrades, will be level crossing free to Dandenong when the current government finishes its planned level crossing removals and also is already slated for a substantial upgrade in another decade of potentially another 2 lines.
There will be plenty of investment opportunities for those who wish to secure their long term future. Investing in property is not always the quickest way to make money, but it is usually the safest. (Red or black at the casino can double your money very quickly, but like stocks in the wrong company, you can also lose all your money just as quick!!
If you are considering an investment property this year please feel free to call for a chat.
Ian James
Director
JPP Buyer Advocates