Looking for land? Look beyond Melbourne’s growth areas and you may be able to score yourself a bargain in these affordable suburbs.
The average house lot in Greater Melbourne growth areas has reached $303,000, but that figure could get you very different investments depending on the suburb.
New research by RPM Real Estate Group bases the $303,000 sum on 4500 land sales recorded across these areas in the last quarter of 2017.
“What you get for your money comes down to lot size, availability, established amenity and infrastructure,” says RPM Real Estate Group research manager Michael Staedler.
“Lot size itself is affected by land availability and what is traditionally expected and accepted in an area.
“For example, the style in the Mitchell area remains one of an almost country lifestyle and the focus has therefore remained on larger lots.”
Because the south-east corridor was the first to expand and now has little developable land left, it attracts a premium price due to lack of availability.
Alternatively, the west, as a traditionally agricultural area, and north, as a traditionally industrial area, have a greater scale of developable land.
“Now that the south-east is practically full, it’s anticipated that prices will continue to rise in the west and east as infrastructure and amenities increase, while land availability decreases,” Michael says.
“We’ve already seen an increase in home buyers who are outpriced in Point Cook and Werribee and instead move out to nearby suburbs such as Lara, where a 400sqm block is around $200,000.”
Research shows that first-home buyers are driven predominantly by emotional factors when buying a home, with most investing within 10-15km of where they grew up.
“Those who grew up in the south-east, where prices are at a premium compared with the west and north, are more likely to compromise on location and move further out, or reconsider their product type,” he says.
Michael cites Wyndham Vale, Lara and Gisborne among areas of potential value for those willing to move away from their home base.
“Lara is undervalued at around $200,000, the Melton suburbs offer good value and Rockbank has seen strong growth over the past 12 months but still has a clear gap from the premium area of Plumpton,” he says.
“Diggers Rest, Riddells Creek and Gisborne are becoming popular with further development likely in the next decade.”
AFFORDABLE PLACES IN MELBOURNE TO BUY A HOME
Many of Melbourne’s outer suburbs provide an opportunity for home buyers to get a first foot on the property ladder.
Frankston North: With a median house price of $498,000, this suburb is 38km south east of the CBD and properties are enjoying annual growth of around 33.5 per cent. The suburb is ideal for keen golfers and is within easy reach of the beach.
Delahey: Delahey has a median house price of around $592,500 and saw a 20.8 per cent rise in prices recently. It’s only 20km north east of the city centre and is value for money compared to middle suburbs with a median price close to $988,000.
Hoppers Crossing: This suburb has a train station and is an affordable entry for first home buyers – median house prices sit around $580,000. Hoppers Crossing is 23km south west of the CBD and has seen annual price growth of 28.3 per cent.
Sunbury: While Sunbury is just over 42km north west of the city, it is serviced by a train line. Properties average $520,000 and the area has seen a healthy rise in prices of around 25.6 per cent.