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.

If you haven’t already, you can subscribe to receive this report directly each month for FREE. Simply jump on the HTW website www.htw.com.au  and follow the prompts.

Thanks to Therese from www.alphabroker.com.au

“Interest-ing! How interest rate cuts drive our real estate” is the theme of this month’s HTW Month in Review

 

– Currently the property market is performing well with steady growth across the board in Melbourne.

– RP Data shows that Melbourne property prices have increased 8.1% over the past 12 months.

– An interest rate fall allows borrowers to feel more confident when borrowing money as their monthly bank repayments would be lower or the amount they borrow could be increased.

– First home buyers would also be encouraged to enter the lower end of the property market and therefore create more demand, which in turn can drive property prices up.

– The lending market would also become more competitive, offering better loan packages as lenders try to attract their share of any increase in borrowing.

– This results in the cost of money becoming cheaper and property values rising.

– The greatest benefit of interest rate cuts will be seen in the lower end of the property market.

– As interest rates are gradually lowered, the Melbourne property market will initially see an increased investment in outer suburban areas of Melbourne such as Craigieburn, Mickleham, Mernda and Doreen.

– These suburbs are at the medium to lower price point value, with a current median sale price of houses in these suburbs of $350,000.

– People living here usually have mid to lower income levels, for example, 19.9% of Craigieburn households earn between $52,000 and $78,000, and would therefore receive more relief or encouragement to borrow when there is an interest rate cut.

– Outer suburbs such as these consist of modern conventional homes that are master planned and mass-produced by large building companies.

– The more people who decide to buy or build a property due to the interest rate cut, the larger the growth of property prices in these suburbs.

– Inner city properties containing higher value properties will be significantly less affected by interest rate cuts.

– The inner suburbs are at the medium to higher price point value with a current median sale price of $1,077,500.

– Generally, those who live closer to the CBD and own their residential dwelling have a higher income, for example, 20.5% of Northcote’s households earn between $78,000 and $130,000 per year.

– With these higher income levels, Parkville and Northcote residents generally own higher value assets such as period or modern dwellings with higher land values.

– As a result, the downward movement of interest rates isn’t going to have as large an effect on these households.

– Cuts to the interest rate would only ensure that consumer confidence remains solid and that properties continue to have steady to moderate growth.

– Many types of investors exist within Melbourne’s property market including property syndicate funds, foreign investment and owners looking to negatively gear.

– All investors receive encouragement from lower interest rates although different categories of investors will be affected to different degrees.

– The RBA lowering the interest rate will boost the already strong number of overseas investors

If you don’t already, you can subscribe to receive this report directly each month for FREE. Simply jump on the HTW website www.htw.com.au  and follow the prompt

 

Thanks to Therese from Alphabroker