HTW Month In Review May 2015 – Prestige Homes

The upper crust! … is the theme for this month’s HTW Month In Review!

Prestige property sectors around the nation – is up for discussion…… Prestige markets are just great fun to analyse. On the serious side, the sector is often a weathervane on market direction. Prestige buyers and sellers also appear to be reasonably immune to interest rate movements.

 

Here are some of the highlights

– Properties valued at over $3 million are generally considered prestige properties in the Melbourne market.

– Prestige properties located in the Stonnington and Boroondara area, as well as inner bayside suburbs such as Middle Park and Brighton have been highly sought after over the past year.

– Suburbs to the inner east and south east of Melbourne’s CBD such as Armadale, Canterbury, Deepdene, Hawthorn, Kew, Malvern, South Yarra and Toorak have a high proportion of dwellings that sell for in excess of $3 million.

– Today these suburb’s retain some of the look and feel of earlier times and the Victorian era, period homes, either in original condition or renovated, are extremely popular with purchasers.

– The prestige apartment market through Melbourne’s CBD, St Kilda Road, Southbank, South Yarra, Toorak and Port Melbourne was stable across 2013 and 2014.

– The average clearance rate in March 2015 was 79.5%, much stronger than the 73.7% recorded last March. It is noted that high-priced areas generally achieve better results than budget suburbs.

– The market is strongly driven by international, primarily Asian investors, securing property within the CBD and the surrounding well-known suburbs with prestigious schools within close proximity.

– The market demand for prestige properties is currently very strong and more high-priced sales are anticipated this year.

– Since the RBA started to cut interest rates in August 2013, the current record low interest rate of 2.25% has sustained housing demand for local investors, while the depreciation in the Australian dollar has continued to attract foreign investment.

– The low mortgage rate is expected to further stimulate the existing strong market conditions. The rates are set to also attract first home buyers and local residents with self-managed superannuation funds who are looking to invest. This will strongly impact the average housing and apartment market.

– The fall of the Australian dollar has generated enormous interest from foreign investors, especially Chinese property buyers as more Chinese investors want to diversify their portfolios and they consider Australia a safe and long-term investment destination.

– Asian buyers are looking for properties within appropriate school zones and near universities.

– Within Melbourne buying property is strongly influenced by the zoning of the property in relation to the school zone requirements.

– Wealthy Asians and locals are ensuring they are within good school zones which are some of Melbourne’s most prestigious suburbs, including Kew and Toorak. This factor is a driver within the high end property market in Victoria.

– There is an increasing amount of large developments set to begin throughout the CBD and outer popular Melbourne suburbs.

– The prestigious property market will also continue to grow steadily with the Australian dollar declining, low interest rates and the appeal of Melbourne to Chinese buyers.

 

As always thanks to Alphabroker for this summary

Highlights Last 3 Months To April 30th Courtesy CoreLogic RP Data

– Best performing capital city: Sydney +5.4%

– Weakest performing capital city: Perth -1.6%

– Highest gross rental yields: Darwin houses at 5.7% and Darwin units at 5.9%

– Lowest gross rental yields: Melbourne houses at 3.2% and Melbourne units at 4.2%

– Most affordable city: Hobart, with a median dwelling price of $320,000

Top 5 most affordable suburbs in each capital city within 10km of the CBD

The cost of housing close to the centre of capital cities is continuing to climb due to the inherent shortage of land, high buyer demand and abundance of amenity in these regions which is resulting in buyers paying a premium in order to secure a home.

It is somewhat unfortunate, however, the liveability of an Australian capital city generally increases substantially as you move closer to the city centre. The reason being that the provision of roads and public transport are better, there is more local social and retail amenity and emergency services and hospitals are more readily available. Furthermore, the better schools are often also located around the inner city suburbs. As a result, demand for housing in these areas is typically much higher resulting in the cost also being higher.

This week we highlight the 5 suburbs in each capital city which have the most affordable median value and are located within 10 kilometres of the CBD.

Top 5 suburbs with the lowest median house & unit value within 10km of the CBD

Median_Price_Table

The point that is immediately noticeable from the table provided with this release is how expensive the median value is for houses within the suburbs listed in Sydney. Turrella is the most affordable suburb listed in Sydney with a median house value of $839,676 which is significantly higher than the most expensive median value listed across all other capital cities. It is a similar story for Sydney units although the gap isn’t as large compared to the other capital cities as it is for houses.

Sydney – all of the suburbs with the most affordable median house value are located south of the city close to the airport. For units, it is a bit more varied with suburbs south, east and west of the city.

Melbourne – the list for houses are scattered across the city however, none are located to the south. Again units are a bit more varied and the locations are scattered around the inner city.

Brisbane – the suburbs for houses listed are typically south, the one exception is Keperra north-west of the city. For units, three suburbs are located south and two located to the north.

Adelaide – all of the suburbs for houses listed are located to the north of the city where values are typically much lower. For units, all of the suburbs except for Brooklyn Park are located to the north of the city.

Perth – all of the suburbs listed for houses are situated north of the city, predictably all away from the water. Similarly for units all are located north of the river.

Hobart – housing close to Hobart is much more affordable than in all other capital cities. All of the most affordable suburbs for houses listed are on the eastern bank of the river except for Goodwood. For units most of the suburbs listed are situated to the north of the CBD.

Darwin – all of the most affordable suburbs for houses listed are in a similar location just north of the airport. It is a similar story for units with all of the most affordable in a similar area north of the city.

Canberra – all of the most affordable suburbs for houses are situated in the Belconnen district of the city. For units all suburbs listed except for Downer are either in the Woden Valley or Belconnen districts.

In all cities, unit stock offers a much more affordable entry point into the inner city areas, given this it is no wonder that unit construction in inner city areas is booming across most cities. In the more expensive cities such as: Sydney, Melbourne, Darwin and Canberra it has become increasingly difficult over recent years to secure houses close to the city at relatively affordable prices. This is a trend that we anticipate will continue over the coming years given that buyers are willing to pay a premium for the lifestyle benefits associated with living closer to the city centre.

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DISCLAIMER
In compiling this publication, CoreLogic has relied upon information supplied by a number of external sources and CoreLogic does not warrant its accuracy or completeness. To the full extent allowed by law CoreLogic excludes all liability for any loss or damage suffered by any person or body corporate arising from or in connection with the supply or use of any part of the information in this publication. CoreLogic recommends that individuals undertake their own research and seek independent financial advice before making any decisions. © 2014 CoreLogic.

HTW Month In Review April 2015 – Vacant Land

Coming into land … is the Theme of this Month’s HTW Month in Review

Vacant property provides an easy to understand benchmark for locations throughout the nation, so this month, we’ve decided to studiously indulge the desire for dirt and look at its influence across our wide brown land, taking a look at Melbourne! Here are some of the highlights:

 

– With the government push to encourage housing development, several land estates have been underway. The main service areas exist on the outer fringes comprising of Point Cook, Williams Landing, Craigieburn, Wallan, Melton, Werribee and Pakenham.

– Some estates are even going one step further and providing common facilities such as gyms, pools and tennis courts for exclusive use of estate residents.

– Point Cook appears to be the most sought after and priciest suburb for land, located approximately 25 kilometres southwest of Melbourne’s CBD. On average to purchase in the suburb will cost $558 per square metre, with a typical allotment costing around $270,000.

– Those unable to afford in the area will be pushed out to areas such as Tarneit with less demand, located 28 kilometres south west with a median price of $470 per square metre and land prices averaging around $189,000 for a standard allotment.

– Lot sizes in the area are becoming smaller in order to attract first home buyers and young families who are taking up around 75% to 80% of vacant land sales and who are budget conscious buyers seeking the flexibility of building smaller houses on smaller blocks.

– A rare development in Ascot Vale, located approximately seven kilometres from Melbourne’s CBD, has recently been undertaken. Known as the Ascot Chase/Enclave development, the project consists of 400 dwellings on 16 hectares of land located on the boundary of Walter Street, the Walter Reserve, Newsom Street, Stanford Street and Doncaster Street.

– Features of the development include close proximity to Melbourne’s CBD, two hectares of parkland, wetlands, an outdoor amphitheatre and walking and cycling trails. The developers of the estate, Mirvac, are releasing land of approximately 250 to 300 square metres and implementing design guidelines such as requiring a minimum 6 Star NatHERS energy rating.

– For individuals eager to purchase in such areas it is imperative to stay updated on local council developments as well as register for developers’ mailing lists.

– Overall, vacant land markets in new estates are performing well with increasing demand evident. Upper Point Cook, one of the newly released estates consisting of 2,000 lots, has been the second fastest selling development in Melbourne, selling out six months ahead of schedule.

– Due to the ample demand for properties in Melbourne and increasing prices, vacant land markets will not have a major impact on the rest of the market. Rather they provide a foot in the door for first home buyers and young families to purchase a home they potentially would not have been able to afford.

Land_Stats_3

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Thanks to Therese from www.alphabroker.com.au

Highlights Over 3 Months To March 31st Courtesy CoreLogic RP Data

Best performing capital city: Sydney +5.8%
Weakest performing capital city: Perth -2.7%
Highest gross rental yields: Darwin houses at 5.7% and Darwin units at 5.9%
Lowest gross rental yields: Melbourne houses at 3.2% and Melbourne units at 4.1%
Most expensive city: Sydney, with a median dwelling price of $690,000
Most affordable city: Hobart, with a median dwelling price of $310,000