• Median house price: $240,256
• Average annual growth: 8%
• Gross rental yields: 5.0%
• Weekly advertised rent: $230
• Median unit price: $223,500
• Average annual growth: 13.8%
• Gross rental yields:5.1%
• Weekly advertised rent: $220
*Source RP Data August 2007
Population growth; Carrum Downs
• Population 2001: 14,980
• Population 2006: 17,216
• Total growth (2001-2006): 15%
*Source RP Data 2007
Buying in Carrum Downs
• $250,000 – A 19m2, three bedroom home on a 650m2 older style block of land are currently providing returns of up to 5% and $270 per week in rent.
• $220,000 – A two bedroom, single bathroom, single lock-up garage unit would currently be returning $235 per week.
* Source Duncan Smith, sales manager, Inesta Property Sales and Management
Who’s buying in Carrum Downs?
• Local investor interest
• Interstate investors – especially those who gained from the WA boom
• Owner-occupiers or first time investors priced out of Melbourne’s inner city property market
• Workers from East Link and inner city commercial relocations
• 45kms from Melbourne’s CBD
• 80kms (1 hour 17 minutes) from Melbourne airport
• 7kms (10-15 minutes drive) to Seaford Beach
• 8km from popular Frankston
*Source Michael Ta, director, Viva Properties
Carrum Downs, up in potential
With the current hype surrounding Melbourne’s inner city suburbs, it is no wonder the outer suburbs such as Carrum Downs in Melbourne’s south east are experiencing increased buyer action.
Situated 45kms from Melbourne’s CBD, this growing suburb has been on a steady rise over the past year. For the period ending August this year, the Carrum Downs house market achieved 8% average annual growth. In the same period, the area recorded a median house price of $240,256 – which is still below booming neighbours Frankston South ($387,250). Gross rental yields reached 5% in August thanks to a healthy weekly rent of $230.
Units in the area enjoyed a 9.6% growth in the August quarter this year and 13.8% average annual growth (ending the same period). Median unit prices are currently around $223,500 and have achieved a gross rental yield of 5.1%.
Carrum Downs was established as its own suburb around the 1930’s. It is just 7 kilometres from Seaford Beach and boasts a coastal habitat, bushlands, and multiple sporting and artistic facilities.
Supported by young but well-established schools, the community is abundant with childcare facilities and adequate bus lines connecting with city bound trains.
“This suburb is also in its infancy,” says Michael Ta, director for Viva Properties.
“More and more infrastructure is being built to cater for families living in this area. New shops, businesses and the East Link will be major contributors to the growth in the area,” says Ta.
Further residential parcels of land are being opened up for development, giving homebuyers and investors greater choice of housing stocks.
“Astute developers are grabbing more and more land in this area,” says Ta.
“There are still older areas that offer excellent value for investors as houses are still relatively young on good sized blocks of land,” he continues.
Value for money
Whilst it is no secret that the ‘ripple effect’ from boom suburbs help neighbouring areas ‘make the map’, it is important to take into consideration the ongoing success of these suburbs.
John Kovacs, managing director for nmddata.com.au says the outer south to south eastern suburbs of Melbourne (such as Carrum Downs, and surrounding suburbs Frankston and Seaford) are among the most affordable for Melbourne.
“You can still purchase in these suburbs [solid brick and weatherboard houses] under $300,000. They may require renovation works, but they still constitute good value to buy, develop and re-sell – and are quite easy to rent due to high rental demands right across Melbourne.” says Kovacs.
The infrastructure influence
The East Link Freeway (previously the Mitcham-Frankston Freeway) is the biggest urban infrastructure project of its kind in Australia, stretching up to 45kms and employing thousands of workers since its commencement in January 2005.
This $2.5 billion piece of infrastructure will connect Melbourne’s eastern and south-eastern suburbs between the Frankston Freeway on the Mornington Peninsula and the Eastern Freeway at Donvale. This will significantly reduce the trip from Carrum Downs to the CBD up to 15-20 minutes quicker.
“The new infrastructure has already boosted property values for the surrounding suburbs and has created a greater range of opportunity for property buyers and investors,” says Kovacs. “This will continue drive property prices of nearby suburbs up for the next 12 to 18 months.”
By linking metropolitan Melbourne with outer-lying suburbs, buyers struggling with high inner city prices are becoming interested in areas such as Carrum Downs for an affordable lifestyle change – without having to travel extensive distances to keep their inner city professions.
The commercial bug
The development of the East Link has already enticed many commercial businesses to relocate to the Carrum Downs area. In turn, property experts predict an increased demand for local property.
“There has been an explosion in commercial land and commercial land sale prices of between 40% and 60% in the last year across the enormous parts of land which follow this East Link,” explained Duncan Smith, sales manager for Inesta Property Sales and Management.
“One of the first points of calls that it is going to hit is the Carrum Downs area. Business that used to operate more in Melbourne metro areas are coming down here because of the easy accessibility that the East Link is creating,” Smith continues.
Local development potential
As a natural progression from the immersion of new business and new jobs, demand for housing has been following suit.
Local developers such as Viva Properties have already had enormous response from buyers, looking to buy positively geared properties in Melbourne’s south-east region. 80% of units (three bedrooms) in their Brunnings Road Estate, Carrum Downs have been sold – each going for $245,000, with a guaranteed rental return of $255 per week.
Whilst the suburb of Carrum Downs as a whole has relatively affordable median house and unit prices, it is the southern edge of Carrum Downs (backing onto Frankston north), which may offer the most potential for capital growth in the near future.
August figures released by RP Data reported a median house price of just $190,000 for Frankston North. Despite this, Smith says the area has been increasing in popularity – encouraging buyers to cross over into the Carrum Downs area.
“You’ve had this almost unnatural growth in Frankston North (ex-housing commission area),” he explains. “Two year’s ago we were selling properties there for $170,000, and they’re now selling for $240,000 – that’s on the southern edge of Carrum Downs,” adds Smith.