– 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
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
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.
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
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
“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
