Regional markets are enjoying a surge in demand for land, but the completion of residential projects could upset this
The spectre of a downturn follows Melbourne, but this could be a benefit for the more far-flung areas of the city.
“Official data shows that there are a few Melbourne pockets where pressure still exists. This includes the outer east (Frankston, Dandenong and Cardinia) and outer north (Hume, Mitchell and the Macedon Ranges),” says Simon Pressley, managing director of Propertyology.
With the metro struggling to maintain property prices, the regional market has been grabbing the opportunities created.
“Ballarat’s property market has risen to become Victoria’s best over the last 12 months [to April 2018],” Pressley says.
By the end of 2017, the median house price in this area had risen by a remarkable 11.7% to just over $300,000. Houses are affordable while displaying growth potential, and the population has been increasing as well, potentially adding to demand.
Shepparton is yet another region Pressley sees as a hotspot, in part due to its thriving agricultural sector.
“Australia’s 34th-largest city is home to one of the world’s largest fruit manufacturing plants. It is also the second largest producer of nectarines and the third-largest producer of cherries and dairy cattle,” Pressley says.
Investors take the brunt
Buyers are also being driven to consider regional pockets near the city, and suburbs on the fringe of Melbourne.
“I expect to see continued demand for land estates, which is where a lot of the new arrivals from interstate and overseas are moving,” says OpenCorp director Matthew Lewison.
“The market’s ability to deliver stock to meet demand has been tested over the last 12 months.”
However, buyers should take into consideration the time gap between owning and actually living in a dwelling, with properties selling 12 months before the land title is provided. Once home construction projects are completed, the market could therefore be flooded.
“Beware that once supply does catch up again, which it will over the next 12 months, these regional markets are likely to be the first to experience a correction,” Lewison advises.
In the meantime, second-tier middle-ring suburbs could be the dark horse in the market as a result of initiatives to improve amenities. Premium suburbs in the inner city are also expected to record moderate levels of growth.
SUBURB TO WATCH
SUNBURY: Apartments making a splash
The suburb of Sunbury is the perfect place to get away from the hustle and bustle of the city without going too far. It is less than an hour from the Melbourne CBD and is rapidly increasing in popularity among tourists and foodies.
Sunbury is renowned for its produce and wine. O’Shanassy Street, regarded as its food centre, is lined with many cafes and restaurants. The suburb is also home to some award-winning vineyards and is rich in historical value.
The house market continues to perform better than the apartment market on many fronts, but the unit lifestyle is catching on, thanks to the low prices and growth potential of the suburb.
Affordability: The median price of a unit in Sunbury is under $400,000
Tourism: Sunbury’s food and wine scene holds much appeal for visitors
Can you afford to buy in this suburb? Find out how much you can borrow