VictoriaProperty Report – January 2014

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Victoria – Property ReportJanuary 2014

National Overview

This quarter we look around the nation to identify affordable properties with the potential to deliver healthy long term gains suitable for first home buyers and also investors. If there is one word that could sum up the key driver for growth, it would have to be ‘infrastructure’. New road / rail links are bringing affordable outer suburbs closer to city centres and employment hubs. New hospitals or tourism precincts are creating jobs. These are valuable factors that will underpin long term capital gains.

ALL ABOARD – NEW RAIL LINKS LET SUBURBS REACH FULL POTENTIALThe inner Sydney property market looks set to be transformed by a number of new light rail systems. Key areas to benefit include the inner west’s Dulwich Hill and Kingsford in the east.

The construction of South West Rail Link is likely to underpin growth in the first home buyer belt of Sydney’s south west, with suburbs like Elizabeth Hills, Gregory Hills and Oran Park well placed to reap the rewards.

For investors with a speculative leaning, suburbs with proximity to Brisbane’s proposed Underground Bus and Train (UBAT) link could offer long term capital growth. The connection is earmarked to run from Dutton Park in the south to Victoria Park in the north, though it’s worth stressing the project is only a proposal at this stage.

ROAD LINKS BRING OUTER SUBURBS CLOSER INThe duplication of Adelaide’s Southern Express Way – due for completion in mid-2014, will vastly improve commuter access to Adelaide’s south. Suburbs like Seaford, Seaford Rise and Port Noarlunga South all offer significant lifestyle benefits and the new road link should bring capital growth to the region.

NEW COMMUNITY INFRASTRUCTURE CREATES OPPORTUNITIESMelbourne’s Broadmeadows is a classic example of an uncut gem for investors. House prices start at the low $350,000s, yet the suburb is located just 16 kilometres north of the CBD. A major investment in community facilities is expected to enhance the area’s appeal.

For investors with a speculative leaning, suburbs with proximity to Brisbane’s proposed Underground Bus and Train (UBAT) link could offer long term capital growth.

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Victoria – Property ReportJanuary 2014

For investors with a five year timeframe, the additional employment generated by the Queensland’s Sunshine Coast University Hospital (due for completion in 2016) should support property values from Caloundra to Maroochydore.

CONSIDER NEIGHBOURING AREASFaced with affordability challenges, it can pay to look at areas where neighbouring suburbs have experienced strong price growth. This is especially true in the Perth suburbs of Parkwood and Lynwood, which remain priced below $500,000 while adjacent suburbs are commanding price tags in excess of $650,000. When suburbs share the same infrastructure facilities, notably transport links, there’s a good chance that price growth will ripple outwards.

A FINANCIAL HELPING HANDIn a number of locations, first home buyers are being encouraged to consider new builds with the enticement of additional state government support. This is especially the case in Tasmania where the recently inflated First Home Builder is seeing buyer interest grow in suburbs along Hobart’s eastern shore in particular Old Beach, Howrah, Tranmere and Oakdowns.

Brendon HulcombeCEO - HERRON TODD WHITE

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Victoria – Property ReportJanuary 2014

Victoria

After a period of strong capital growth, Melbourne can be a challenging city for first home buyers and investors in the under-$650,000 bracket. Nonetheless good buying opportunities can still be found in near-city locations and throughout regional Victoria.MelbourneOPPORTUNITIES FOR FIRST HOME BUYERSFor Melbourne first home buyers with a budget below $650,000, the suburb of Altona located 13 kilometres south west of the city’s central business district (CBD) offers an affordable step onto the property ladder. Median house prices are around $580,000 with units priced in the low $400,000s.

The suburb’s profile has been lifted in recent months following the well-publicised sale of former Prime Minister Julia Guillard’s Altona home. However the suburb has plenty of other points of appeal including a bayside lifestyle and proximity to the adjoining Hobsons Bay area.

Altona’s Esplanade foreshore has undergone extensive redevelopment in recent years and now includes major parks and wetland areas including Cherry Lake Reserve, which all add to the suburb’s amenity.

Altona offers proximity to the city centre and good local transport options including rail and freeway access via the nearby West Gate Freeway. With a range of schools, retail and recreation facilities, the suburb is also within easy reach of nearby high profile Williamstown, offering the beach, cafes and restaurants. These are key factors likely to underpin future price growth.

Altona’s mix of affordable housing mainly comprises homes constructed between 1950 and 1970. The majority of dwellings offer 3-bedrooms with lot sizes ranging from 350 square metre to 650 square metres. There is also a growing number of contemporary strata townhouses in complexes of three to four units.

First home buyers in the suburb have the advantage that Altona tends to fly under the radar of investors. This is possibly owing to Altona’s former reputation as a ‘blue collar’ suburb and its mix of residential and industrial use. Nonetheless it enhances the prospects for first home buyers to secure an affordable property.

OPPORTUNITIES FOR INVESTORSBroadmeadows offers healthy prospects for investors looking in the under-$650,000 price range. House prices are around the low $350,000s,

Altona offers proximity to the city centre and good local transport options including rail and freeway access via the nearby West Gate Freeway.

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Victoria – Property ReportJanuary 2014

yet the suburb is located just 16 kilometres north of Melbourne’s CBD. Broadmeadows provides excellent road links to other parts of the city via the Western Ring Road and the rail network.

Typical housing in Broadmeadows comprises 3-bedroom brick houses on lot sizes ranging from 400 square metres to 600 square metres.

The real upside to Broadmeadows is the planned community infrastructure projects. Future works include the regeneration of Broadmeadows Town Park – a collaboration between Hume City Council, the Victorian state government and VicRoads. On completion it will feature a park area with pedestrian walkways and cycle ways connecting Moonee Ponds and Merlynston Creek via the existing town centre. Broadmeadows Leisure Centre has also benefitted from a significant redevelopment.

Regional VictoriaOPPORTUNITIES FOR FIRST HOME BUYERSThe regional town of Torquay, located 21 kilometres south of Geelong is worth a look for first home buyers. House prices are around the low $600,000s so it would fit within a buying budget of $650,000. Typical properties comprise contemporary freehold dwellings on 450 square metres to 650 square metre sites.

It’s a very picturesque township within a location that forms part of the surf coast and the commencement of the Great Ocean Road. Famous nearby surf breaks include Bells Beach. There is a prevailing perception of Torquay as a clean and safe town that’s great for families, and over the past five years local property values have climbed by around 20%. This has largely been underpinned by a rapidly growing population – the result of ‘sea change’ migration to the area.

Affordability and an abundance of lifestyle benefits should support long term capital growth in Torquay backed by proximity to Geelong where a major rail link offers access to Melbourne via the V/Line.

OPPORTUNITIES FOR INVESTORSFor investors, Sale – located 212 kilometres east of Melbourne, offers value plus a diverse local economy. House prices are around the low $300,000s and price growth over the past five years has been in the order of 22%.

Sale boasts an established town centre with quality infrastructure. The local population is approximately 14,000 – large enough to support strong rental demand. The city also offers five primary schools and two secondary schools.

One of the key aspects that underpin Sale as an area worth investing in is the diverse local economy. A range of industries operate in the region including agriculture, retail and professional services, coupled with the East Sale RAAF base. The port of Sale has undergone redevelopment, and this provides further opportunities for industry, which should enhance future capital growth prospects.

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