Agents urge buyers to look at suburbs neighbouring the more favourite blue-chip areas.
Spotswood, the tiny suburb bounded by the Westgate Freeway, the railway line and the Yarra, has had little press since it lent its name to a 1990 comedy, starring Anthony Hopkins. But Brad Teal, director of Brad Teal Real Estate, believes the area will soon star again, this time as a property darling.
”Spotswood is a long, skinny postcode that is undergoing urban renewal around the railway station and I think it will enjoy very strong prospects in years to come because it’s actually closer to the CBD than [Williamstown], with the Westgate’s freeway access and the train.”
Mr Teal, whose agents cover Melbourne’s north-west, also sees the potential for good buying in Niddrie, Airport West, Fawkner and Hadfield. The common factor in all those areas is that they are ”poorer sisters” to more well-known suburbs, namely Williamstown, Essendon and Coburg, and are likely to benefit as those ”epicentre” areas grow in value.
”Essendon rises, and therefore Niddrie and Airport West will rise afterwards as people get priced out of the epicentre marketplace.”
Peter Hay, director of Hay Property Group, suggests buyers looking for one or two-bedroom units should consider North Fitzroy.
”One or two bedrooms, are still sub $650,000, whereas Elwood and St Kilda have already topped that now. They have jumped $100,000 in 12 months, so I’d look just inner north. If you want four bedrooms, two bathrooms and a double garage, the other areas that are picking up, and still have growth to go, are Rowville, Ferntree Gully, Vermont, Wantirna.”
Buyers advocate Peter Rogozik steers clear of the term ”hotspot”, believing it can lead naive buyers to purchase in areas without paying enough attention to the fundamentals of good property investment.
However, he sees potential for buyers in inner north and inner western suburbs that have undergone gentrification, such as Footscray, Kingsville, Sunshine and Coburg. ”You can buy in these areas for hundreds of thousands of dollars less than your traditional blue-chip suburbs and not sacrifice any type of capital growth.”
Mike McCarthy, chief executive of Barry Plant, is a big fan of Frankston. ”A lot of people talk about Melbourne getting too expensive and Frankston, yes it’s a long way out, but it has easy access now and there’s really great buying there with really great value for money.
”In terms of affordability, it’s hard to find anywhere in Melbourne that offers as nice an area to live in, with that sort of amenity, at that price point. The other area I like is Reservoir in the north … there’s probably an oversupply of properties and there’s a lot of potential for developers with big blocks.”
Mr McCarthy says areas like Reservoir offer buyers the ability to set themselves up for retirement with the strategy of securing a big block to use for their family home now, with the aim of subdividing later. ”There are huge blocks out there that you could probably put two, three or four townhouses in potentially. You might find yourself, in 10 years, sitting on a really valuable piece of dirt.”
He is also keeping an eye on Ringwood, which has great access to the city with the bypass, and is likely to benefit from the opening of megamart Costco and the future East West Link. Buying tips for 2014
- Areas where the median price point has moved significantly less than Melbourne’s average can offer good opportunities for future growth.
- Look out for signs that an area is undergoing a renewal.
- Factor in the impact of major infrastructure projects, such as the East West Link.
- Focus on areas within five to eight stations of the CBD, which will ensure strong rental and owner-occupier demand in the future.
- Aim to buy a house that has land.
- Check owners corporation fees, because it’s the hidden costs that reduce investment return.
- Be aware of the oversupply of new apartments in the inner city.
- Opt for older style or period homes that can’t be replaced.
- Remember to factor in the other fundamentals needed for capital growth, such as transport, schools, streetscape, and proximity to lifestyle destinations, including cafes.