Strong price growth, continued gentrification and reduced time on market mean that these 12 suburbs are the ones to watch this year, according to the head of a peak real estate body.
Despite already strong growth in 2015, Melbourne suburbs such as Footscray and Spotswood are still worthy of investors' consideration in the new year, according to the CEO of the Real Estate Institute of Victoria.
Enzo Raimondo named the two suburbs in a list of 12 locations to watch in 2016, published on the REIV website yesterday, which also included suburbs in the city’s east, south and north.
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Mr Raimondo explained that the trend toward gentrification in Footscray, where the median property price is currently $780,000, according to the REIV, is set to continue driving growth in what is still a relatively affordable inner-city suburb.
“Footscray remains affordable given its location in Melbourne’s inner ring. Improving infrastructure and gentrification [is] likely to result in solid long-term growth,” he wrote.
Promising sales data from 2015 ensured nearby Spotswood’s inclusion on the list, according to Mr Raimondo.
“[It's] another inner-west Melbourne suburb which is poised for further growth in 2016. Despite listings increasing significantly in 2015, the median days on market fell 23 days and clearance rate improved 13 per cent. Median house price remains well below the inner Melbourne median of $1,236,000,” he explained.
In the city’s east, it’s a similar story, with infrastructure developments and days on market providing promising signs for Burwood East.
“[Burwood East is] a big growth area with extensive development underway at present. While the median house price is high, days on market continue to fall, down from 37 days in 2014 to 30 days in the past 12 months, showing increasing buyer interest,” Mr Raimondo wrote.
In Glen Waverley, and neighbouring Mount Waverley, access to reputable schools will continue to drive demand, according to Mr Raimondo.
“Glen Waverley [is a] middle-eastern suburb which has been in the spotlight in 2015, and will continue in 2016. Given it is zoned for quality public school Glen Waverley Secondary College, buyer demand is likely to continue for the foreseeable future,” he predicted.
Melbourne might be a city renowned for its auction activity, but the number of private sales in the bayside suburb of Chelsea are one of the reasons it made the list.
“[Chelsea is] close to the bay and with good transport to the CBD. [It] saw a strong private sale market and solid auction activity in 2015, as well as double-digit annual growth,” Mr Raimondo explained.
Other suburbs to make the list included Altona and Sunshine, in the west, Preston and Epping, in the north, Montrose, in the east, and Seaford, in the south.