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Where to invest in Melbourne’s east
January 8, 2018
Thinking of making the most of a slowing market and looking to invest in Melbourne’s east? While inner-eastern areas of Melbourne have seen a slight decrease in growth this past year, the middle and outer rings of Melbourne, especially in the east, have seen significant rises. Affordability remains the major draw-card for these suburbs, along with a continued high level of demand for both houses and units/apartments.
Sale volume has decreased -5.4 per cent over the past year, which has helped drive demand and pushed the median sale price up 14.3 per cent from $810,000 to $926,000. The suburb has also seen a 42.5 per cent increase over three years, where the median sale price was at $650,000.
Units have also increased 18.5 per cent in a year to $593,000 from $500,500 and 37.9 per cent in three years. While other areas have seen the bulk of growth in units slow to a near halt this past year compared to the past three years as a whole, 2017’s growth in median sale prices for units accounts for such a large portion of the three year growth in Ringwood, indicating a strong market.
Lilydale saw a decrease in sale volume of -20.6 per cent over the past year, which helped drive up demand as well as the median sale price of houses by 14.3 per cent from $640,000 to $731,500 while the median sale price over three years increased 49.9 per cent. Sale volume has also decreased over this period by -43.5 per cent, indicating that the huge rise in sale prices isn’t simply a reflection of a feverish market but one that has been driven by low supply. This is a promising indication of the strength in the local market as the property market as a whole may show signs of slowing over 2018 and vendors hold on to their properties to see where it is heading. This means a probable increase in property prices in the Lilydale area that may not match the previous three years but neither should they go the other way.
As far as this list is concerned, Mooroolbark is one of the most promising areas for potential investment, due to its significant growth that is neither eye-watering nor meagre, as well as its affordability.
Median sale prices for houses increased in the past 12 months by 15.8 per cent from $615,052 to $712,500 and a significant 51.6 per cent over three years. Sale volume decreased quite a bit over three years (-28.8 per cent) but not much over the past year (-4.2 per cent), driving significant demand for properties in the area.
Meanwhile, units in Mooroolbark have experienced a similarly large increase in median sales values: 43 per cent over three years. However, this dropped off almost completely over 2017, increasing only 2.9 per cent from $528,000 to $543,500.
Median sale prices for houses in Balwyn have seen a 10.6 per cent increase in 12 months (from $2,070,000 to $2,290,000 and a 36.7 per cent increase over three years, which is a little more restrained than some of the more outer-eastern suburbs of Melbourne. Units have also seen a significant rise in three years (36.9 per cent) in median sales price.
Box Hill has seen staggering growth in house values over the past three years, with this slowing somewhat in 2017. Sale volume for houses almost halved at 43.1 per cent over three years and the median sale price of houses in the area increased by an incredible 94 per cent in the same period, while increasing 22.9 per cent over the past year from $1,450,000 to $1,782,500.
Box Hill has been touted as Melbourne’s hottest suburb over this period and with 11 high rise towers approved for construction alongside the influence of the planned NorthEast Link, Box Hill is all set to become the equivalent of a satellite business hub much like Werribee in the west and Parramatta in Sydney.
With this glut of high density living, however, is the chance for unit prices to fall as they have experienced comparatively less increases over the past year (7.9 per cent) or three years (9.3 per cent).
For savvy investors watching the market, Kew seems to have experienced a peak in house price growth in 2016, with the median sale price of houses in 2017 decreasing by -9 per cent after a relatively mild increase of 8.6 over three years. This may indicate that there will be an ideal time to enter the market in 2018/19 to make the most of a projected strengthening of the economy come 2020.
The median sale price of houses in Donvale has continued to grow despite a slowdown in the inner city market. Over three years the median sale price of houses in Donvale has increased an impressive 40.7 per cent and 12.9 per cent over 2017 (from $1,125,000 to $1,270,000). Units have also seen a large growth in median sales values, increasing 26.7 per cent over three years from $580,000 to $734,988. Beneficial infrastructure developments, like the NorthEast Link, that will impact other outer eastern areas such as Box Hill will have a similar impact on Donvale, while the area’s appeal for families and those seeking less dense living should continue to protect the area from any significant fall in house prices.