Affordable & Liveable Property Guide Melbourne Metro 2 nd Half 2021
MELBOURNE METRO Annual Change^
OVERVIEW
Sales
Median property prices in Melbourne Metro increased by 17.7% for houses to $1,160,000 from Q3 2020 to Q3 2021*, and by 2.4% for units at $630,000. Between Q3 2020 – Q3 202,1 total sales in Melbourne Metro increased by 73.0% (to 5,528 sales) for houses and by 90.0% (to 6,114 sales). Melbourne Metro’s median price growth has occurred amidst increased sales activity, indicating real returns in capital investment and high demand. Property owners can be highly confident in their asset’s ongoing value. An estimated $24.5B of developments is planned across the 2nd half of 2021. A focus on infrastructure projects will improve liveability for residents and create jobs in the construction phase, while commercial projects are also a positive indicator of future long-term employment. This stimulates a more vibrant economy in Melbourne Metro as the economy re-opens.
Median Price Rental Price
Sales Median Price Rental Price
RECENT TOP PERFORMERS Area
Inner
North
South
East
West
Suburb Flemington
Type
Median Price 2020
Median Price 2021*
House $1,000,000 $1,276,000
Price Growth
Projects 2021***
27.6%
$202.0M
Carlton
Unit
$340,000
$445,000
30.9%
$143.1M
Preston
House
$930,000
$1,215,000
30.6%
$378.3M
Coburg
Unit
$527,000
$594,000
12.7%
$122.0M
26.3%
$176.3M
Highett
House $1,235,000 $1,560,000
Bentleigh
Unit
$665,000
$862,000
29.6%
$30.0M
Oakleigh South
House
$908,000
$1,118,500
23.2%
$37.6M
Burwood East
Unit
$500,000
$730,000
46.0%
$41.5M
South Kingsville
House
$847,000
$1,100,000
29.8%
$101.5M
Altona North
Unit
$658,000
$750,000
13.9%
$174.5M
METHODOLOGY
$1.16M
$630K
HOUSE
UNIT
MEDIAN RENTAL PRICE
$470
$400
HOUSE
UNIT
BENCHMARKS
This affordable and liveable property guide for Melbourne Metro analyses all suburbs within a 20km radius of the Melbourne CBD. The following criteria were considered: •
Property trends criteria – all suburbs have a minimum of 20 sales transactions for statistical reliability purposes. Based on market conditions, suburbs have either positive, or as close as possible to neutral price growth between 2020 to 2021*.
•
Investment criteria – as of September 2021, suburbs considered will have an onpar or higher rental yield than Melbourne Metro, and an on-par or lower vacancy rate.
•
MEDIAN SALE PRICE
Affordability criteria – identified affordable and liveable suburbs have a median price below a set threshold. This was determined by adding percentage premiums to the Victoria (VIC) average home loan, which was $568,188** as of Q2 2021. Premiums of 71% for houses and 6% for units were added, which were below those required to reach Melbourne Metro’s median prices (104% for houses and 11% for units). This places the chosen suburbs below Melbourne’s median prices, meaning that the suburbs identified within this report are more affordable for buyers.
•
Development criteria – suburbs identified must have a high total estimated value of future project development for the 2nd half of 2021, as well as a higher proportion of commercial and infrastructure projects. This ensures the suburbs show signs of sustainable economic growth, in turn positively affecting the property market.
•
Liveability criteria – all identified suburbs have low crime rates, availability of amenities within a 5km radius (i.e. schools, green spaces, public transport, shopping centres and health care facilities), and an unemployment rate on-par or lower in comparison to the VIC average (as determined by the Department of Jobs and Small Business, June Quarter 2021 release). 30th
*Median price quoted captures sale transactions from 1st January 2021 to September 2021, or Q1 2020 – Q3 2021. **Average home loan figure is derived from June Quarter 2021 Housing Affordability Report by the Real Estate Institute of Australia (REIA) and Adelaide Bank. ***Project development is based on aggregate of estimated construction value for residential, commercial, industrial, mixed-use and infrastructure projects scheduled to commence in the 2nd half of 2021 as stated by the relevant data authority. ^Annual Change is reflective of median price change from Q3 2020 to Q3 2021. Figures displayed in infographics are for the period Q3 2020. Source: APM Pricefinder, REIA, SQM Research, Cordell Connect, Department of Jobs and Small Business. © PRD 2021.
MELBOURNE METRO
2.5%
3.4%
HOUSE YIELD
UNIT YIELD
3.5%
VACANCY RATE
BENCHMARKS VICTORIA
4.4% UNEMPLOYMENT RATE
AVERAGE HOME LOAN
$568,188
AVERAGE VENDOR DISCOUNT
KEY COMMENTS Average vendor discounts between Q3 2020 and Q3 2021 have swung to a premium of 4.2% for houses and tightened to -0.5% for units. Melbourne Metro market conditions have shifted to favour sellers, where buyers have to either offer higher or close to the first list price. Unit buyers can still benefit from a discount, however time is limited.
4.0%
3.8%
2.7%
2.0% 1.0%
4.2%
3.0%
-0.4%
-0.5%
Q2 2021
Q3 2021
-1.1%
-2.4%
-0.1%
-2.8%
-2.0%
-3.8%
-1.0%
-2.5%
0.0%
-3.8%
Change from Listing to Sale Price
5.0%
-3.0%
The dominant proportion of homes sold in Melbourne Metro across 2021# were in the premium price bracket of $900,000 and above (66.3%). Units also recorded a dominant premium price bracket of $600,000 and above (56.6%). Affordable options for first home buyers are still available, more so in the unit market, however have shrunk in the past 12 months.
-4.0% -5.0% Q2 2020
Q3 2020
Q4 2020
Q1 2021
House
Unit
MARKET PERFORMANCE House Sales
Unit Sales
House Median
Unit Median
$1,400,000
12,000
$1,200,000
10,000
$1,000,000
8,000
$800,000 6,000 $600,000 4,000
$400,000
2,000
$200,000
0
$0 Q3 2020
Q4 2020
Q1 2021
Q2 2021
Q3 2021
PRICE BREAKDOWN 2021# HOUSES SOLD
UNITS SOLD
6.8% 10.2% 8.7%
19.4%
Less than $599,999 $600,000 to $699,999
$450,000 to $499,999
7.5%
$700,000 to $799,999
66.3%
8.1%
$800,000 to $899,999 $900,000 and above
#2021
Less than $449,999
56.6%
8.0% 8.5%
encapsulates sales transactions for Q3 2020 – Q3 2021 (01/01/2020 – 30/09/2021) only. Source: APM Pricefinder. © Copyright PRD 2021.
$500,000 to $549,999 $550,000 to $599,999 $600,000 and above
MELBOURNE METRO MEDIAN HOUSE PRICE 2021* 20KM FROM CBD 5
3
6 2
4
1
MELBOURNE AFFORDABLE & LIVEABLE SUBURBS LEGEND
RENTAL YIELD
Data not available Suburb
House
1
Point Cook
3.2%
2
Keilor East
3
Greensborough
$0 - $500,000
Suburb
Unit
4
Truganina
3.9%
3.2%
5
Greenvale
5.8%
2.6%
6
Hadfield
3.5%
$500,000 - $800,000 $800,000 - $1,000,000 $1,000,000 - $2,000,000 $2,000,000+ 20km from CBD Translucent colours for <20 sales
*House median price reflected in the heat-map captures sale transactions from 1st January 2021 to 30th September 2021. Source: APM Pricefinder, ESRI ArcGIS, SQM Research. © PRD 2021.
RENTAL GROWTH 2021 € In September 2021, house rental yields in Melbourne Metro were recorded at 2.5%. In the 12 months to Q3 2021, the median house rental price softened by -5.1% to $470 per week. The Melbourne Metro rental market is looking to improve in the near future, as the state is coming out of COVID-19 lock downs and international borders re-opening. Two bedroom houses were the least impacted, recording a median price of $500 per week. A softening in median rental prices was felt mostly in the unit market. This is potentially a consequence of international border closures, as the Melbourne Metro apartment market was predominately demanded by overseas students. In September 2021, Melbourne Metro recorded a vacancy rate of 3.5%, above that of Sydney Metro (2.7%) and Brisbane Metro (1.4%). Vacancy rates in Melbourne Metro have considerably tightened since reaching a peak in December 2020 (4.7%). Melbourne Metro’s vacancy rate continues to show a declining trend since the beginning of 2021, suggesting higher rental demand as the area comes out of lock downs and restrictions. This should provide greater confidence to investors.
2 Bed House
3 Bed House
4+ Bed House
1 Bed Unit
2 Bed Unit
3+ Bed Unit
0.0%
-2.2%
-11.1%
-5.8%
-4.7%
-3.5%
$500
$450
$480
$325
$410
$550
RENTAL VACANCY RATES 2021 5.0% 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0%
REIA 'Healthy' Benchmark
RENTAL YIELD 2021 §
3.7%
2.2%
2.5%
5.2%
3.4%
3.4%
Brisbane Metro
Sydney Metro
Melbourne Metro
Brisbane Metro
Sydney Metro
Melbourne Metro
€ Annual rental growth is a comparison between Q3 2020 – Q3 2021 (01/01/2020 – 30/09/2021) house median rent figures. § Rental yields shown are as reported at September 2021. Source: APM Pricefinder, SQM Research. © Copyright PRD 2021.
Sep-21
Jun-21
Mar-21
Dec-20
Melbourne Metro
Sep-20
Jun-20
Brisbane Metro
Mar-20
Dec-19
Sep-19
Jun-19
Mar-19
Dec-18
Sep-18
Sydney Metro
PROPERTY CLOCK - HOUSES Peak
Upswing
Downswing
Bottom
AFFORDABLE & LIVEABLE HOUSE SUBURBS POINT COOK 3030
KEILOR EAST 3033
2 Bed 3 Bed 4+ Bed
GREENSBOROUGH 3088
2 Bed 3 Bed 4+ Bed
2 Bed 3 Bed 4+ Bed
Located about 20.0km from the Melbourne CBD. Median House Price $702,000 • 2 Bed Median Price $492,000 • 3 Bed Median Price $645,000 • 4+ Bed Median Price $740,000
Located about 10.0km from the Melbourne CBD. Median House Price $920,000 • 2 Bed Median Price $728,000* • 3 Bed Median Price $878,000 • 4+ Bed Median Price $1,062,000
Annual Median Price Growth
10.6%**
Annual Median Price Growth
9.9%**
Annual Median Price Growth
22.0%**
Vacancy Rate (Sep-21)
3.1%
Vacancy Rate (Sep-21)
2.4%
Vacancy Rate (Sep-21)
1.2%
Rental Yield (Sep-21)
3.2%
Rental Yield (Sep-21)
3.2%
Rental Yield (Sep-21)
2.6%
Key Amenities (5km) Total Projects ($)
Key Project
Unemployment Rate
Werribee Mercy Hospital
$25.8M^ Upper Point Cook Estate Remaining Stages ($20.0M, 470 Lots)
3.1%
Located about 18.0km from the Melbourne CBD. Median House Price $970,000 • 2 Bed Median Price $860,000* • 3 Bed Median Price $904,000 • 4+ Bed Median Price $1,080,000
Key Amenities (5km)
Sunshine Hospital
Key Amenities (5km)
Total Projects ($)
$38.4M^
Total Projects ($)
Key Project
Unemployment Rate
Residential Development Valley Lake ($30.0M)
5.6%↑
Key Project
Unemployment Rate
Westfield Plenty Valley
$22.2M^ Hailes Street Apartments ($4.8M, 21 Apartments)
4.4%
^Quoted estimated values of projects are based on reported land/construction values as stated by the relevant data authority and do not signify their commercial/resale value. *Median price is quoted as an indication only due to having less than 20 sales transactions. ↑Quoted unemployment rate is an indication of only having a higher rate than the state average **Median price growth quoted captures sale transactions from 1st January 2021 to 30th September 2021, or Q1 2021 – Q3 2021. Source: APM Pricefinder, SQM Research, Cordell Connect, Department of Small Jobs and Business, Google Maps. © PRD 2021.
PROPERTY CLOCK - UNITS Peak
Upswing
Downswing
Bottom
AFFORDABLE & LIVEABLE UNIT SUBURBS TRUGANINA 3029
GREENVALE 3059
1 Bed 2 Bed 3+ Bed
HADFIELD 3046
1 Bed 2 Bed 3+ Bed
1 Bed 2 Bed 3+ Bed
Located about 17.0km from the Melbourne CBD. Median Unit Price $446,000 • 1 Bed Median Price N/A • 2 Bed Median Price $374,000* • 3+ Bed Median Price $460,000
Located about 18.0km from the Melbourne CBD. Median Unit Price $590,000 • 1 Bed Median Price N/A • 2 Bed Median Price $440,000* • 3+ Bed Median Price $600,000
Annual Median Price Growth
3.1%**
Annual Median Price Growth**
11.3%**
Annual Median Price Growth**
3.4%**
Vacancy Rate (Sep-21)
1.2%
Vacancy Rate (Sep-21)
2.4%
Vacancy Rate (Sep-21)
3.1%
Rental Yield (Sep-21)
3.9%
Rental Yield (Sep-21)
5.8%
Rental Yield (Sep-21)
3.5%
Key Amenities (5km) Total Projects ($)
Key Project
Unemployment Rate
Werribee Mercy Hospital
$1.9B^ Mount Atkinson Mixed Use Precinct ($1.7B)
4.4%
Key Amenities (5km) Total Projects ($)
Key Project
Unemployment Rate
Melbourne Airport
$9.5M^ Somerton Road Multiple Units ($3.2M, 18 Townhouses)
5.6%↑
Located about 10.0km from the Melbourne CBD. Median Unit Price $600,000 • 1 Bed Median Price $367,000* • 2 Bed Median Price $562,000 • 3+ Bed Median Price $641,000
Key Amenities (5km) Total Projects ($)
Key Project
Unemployment Rate
Broadmeadows Hospital
$8.9M^ Vic Ses Broadmeadows ($4.5m)
5.4%↑
^Quoted estimated values of projects are based on reported land/construction values as stated by the relevant data authority and do not signify their commercial/resale value. *Median price is quoted as an indication only due to having less than 20 sales transactions. ↑Quoted unemployment rate is an indication of only having a higher rate than the state average **Median price growth quoted captures sale transactions from 1st January 2021 to 30th September 2021, or Q1 2021 – Q3 2021. Source: APM Pricefinder, SQM Research, Cordell Connect, Department of Small Jobs and Business, Google Maps. © PRD 2021.
PROJECT DEVELOPMENT MAP 2ND HALF 2021*
LEGEND Commercial Infrastructure Industrial Mixed-use Residential
$1.8B
$5.9B $7.5B
$5.4B $3.8B
Project£
Location
Type
Estimated Valueµ
Suburb
1
Chadstone Shopping Centre Redevelopment
Commercial
$685,000,000
Malvern East
2
Westfield Doncaster
Commercial
$500,000,000
Doncaster
3
435 Bourke Street Office Tower
Commercial
$300,000,000
Melbourne
4
51 Flinders Lane
Commercial
$200,000,000
Melbourne
5
Little Collins Street Office - 130 Collins Street
Commercial
$190,000,000
Melbourne
6
Next Dc M3 - Phase 1
Commercial
$229,771,000
Footscray West
7
The Walk Arcade Redevelopment Holiday Inn Hotel & Hotel Indigo
Commercial
$200,000,000
Melbourne
8
Seqirus Biotech Manufacturing Facility
Industrial
$800,000,000
Melbourne Airport
9
Assembly Business Precinct Broadmeadows Overall Project (Former Ford Site)
Industrial
$500,000,000
Campbellfield
10
E-gate (Former West Melbourne Rail Yards)
Infrastructure
$5,000,000,000
West Melbourne
11
Prahran Housing Estate Renewal
Infrastructure
$200,000,000
Prahran
12
So/ Hotel (Accor)
Infrastructure
$200,000,000
Melbourne
13
Bangs Street Public Housing Renewal Prahran
Infrastructure
$180,000,000
Prahran
14
Marvel Stadium Redevelopment
Infrastructure
$225,000,000
Docklands
15
85 Spring Street Mixed Use Development- (142 Apartments)
Mixed-use
$200,000,000
Melbourne
16
Dynon Mixed Use Precinct
Mixed-use
$500,000,000
West Melbourne
17
Home Docklands-(676 Apartments)
Mixed-use
$230,000,000
Docklands
18
Melbourne Quarter Tower Three
Residential
$250,000,000
Docklands
19
The Muse Melbourne- (42 Apartments)
Residential
$200,000,000
Melbourne
20
Mount Atkinson Mixed Use Precinct Remaining Stages-(7341 Dwellings)
Residential
$1,700,000,000
Truganina
* Project development map showcases a sample of upcoming projects only, due to accuracy of addresses provided by the data provider for geocoding purposes. £ Top Projects are based on suburbs located within a 20km radial distance of the Melbourne CBD. µ Estimated value is the value of construction costs provided by relevant data authority, it does not reflect the project’s sale/commercial value. Source: Cordell Connect database, ESRI ArcGIS. © PRD 2021.
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