Melbourne Real Estate - Is it time to buy?
Deciding whether or not to invest in the Melbourne real estate market is a tricky decision to make. The city’s popularity worldwide is growing and with good reason. Who wouldn’t want to live in this famed city of rich culture and enviable urban feats? After consistently ranking as one of the most liveable cities in the world for years, it’s no wonder Melbourne is receiving global attention. Investors and foreign buyers are entering the local real estate market, intensifying competition. As a result, it continues to drive property prices up. Now residents are faced with a big question: is this the right time to purchase a property?
How is the Current Melbourne Real Estate Market Performing?
The city’s current situation is intriguing and complex. Spreading nationwide is a mounting concern that real estate is too expensive for young singles, couples and families. There is also the worry that the city is headed for an oversupply in apartments. An expected 24,000 apartments are set to rise in Melbourne within the next 3 years. However, interestingly this is coinciding with a jump in the number of migrants and offshore investors. Many of these people taking up residence in the city, are filling in the demand for apartments in Melbourne real estate. While it remains uncertain, it would appear that with this influx, the likelihood of an oversupply may be far-fetched at this point.
Housing sales in general remain strong. Last July, the clearance rate for Melbourne reached 80% with certain areas reaching a clearance rate of 96.7%. There is an especially strong demand for suburban properties that are located less than 20km from the city.
Suburban Hotspots to Consider
If you’re thinking of acquiring a home in close proximity to the city, PRD nationwide Research recommends the following three as most affordable. This list was recently published in their research, Property Affordability 2016 Hotspots Report Melbourne. Remember however, affordability isn’t the only factor that should be taken into consideration when buying for investment.
1. Heidelberg Heights
The median price for a house in this area is $653,000. The availability of schools, hospitals, clinics and supermarkets makes it a desirable option when considering venturing into the Melbourne real estate market. It’s close to the central business district (CBD) of Melbourne and has the presence of La Trobe University (one of the country’s leading universities). A total of $32.9M worth of infrastructure projects are set to begin development over the next year and additional properties will be constructed to address the increasing demand. With good infrastructure and the close vicinity to the city centre, houses here are priciest among the three suburbs we have looked at.
2. Sunshine West
Property located in Sunshine West has a current median price of $460,000, highlighting its affordability. PRD nationwide deems the area as ideal for first home buyers and young families. Aside from the affordability of property, the suburb has a reputation for employment and innovation which is enticing professionals and investors. Sunshine West also has a string of projects valued at around $30.5M, planned for construction over the next 12 months. It’s not a greatly developed area currently however its location and vicinity to various amenities are attracting buyers.
This suburb easily draws the eyes of investors thinking of investing in Melbourne real estate. Of the three, it’s the farthest from the city centre but only by a kilometre. Its several public transportation options that run to the CBD makes it a convenient location for professionals and commuters. The Citylink Toll road also increases access for residents who own cars. The median house price is $512,500.
Overall the property market is looking strong with increased infrastructure in these areas and relative affordability, there are a range of opportunities for those looking to buy their first property. If you are considering purchasing an apartment, you may want to study the market more closely and factor in ‘land value’ when doing your due diligence. The smaller the building the better the land value component. . It remains to be seen whether the city will evade the danger of apartment oversupply however demand for suburban homes, remains healthy.
Property is a long-term investment and it’s always advisable to gather as much relevant information on the real estate market and your desired areas as you can. When creating your list of property options, you should consider a range of factors including the yield rates of each area, sales history, rental demand, buyer demand, public transport options and more. With a plethora of things to consider, feeling overwhelmed is normal and is to be expected, particularly if you’re new to the property market. It’s always wise to seek help from a Melbourne real estate expert, like a licensed buyer’s advocate, to help you get on the right track and protect you during the buying process. At Property Mavens, our team of experienced professionals are here to help. Contact our team today at (03) 9988 2266.