The outer suburbs of one Australian capital are experiencing steady growth as buyers look for value further from the CBD, according to new data.
Recent quarterly figures released by the Real Estate Institute of Victoria (REIV) revealed that the best performing areas in Melbourne were in the city’s outer suburbs.
Based on median house prices over the first quarter of 2016, suburbs in the north and west recorded the most growth in Melbourne.
REIV president Geoff White said that this included Epping, Caroline Springs and Werribee.
“Epping and Bentleigh East recorded growth of 10.8 and 9.9 per cent respectively,” he said.
“The only suburb within 10 kilometres of Melbourne within the top three suburbs was Malvern East, which delivered quarterly growth of around 13 per cent.
“Other outer suburbs delivering high quarterly growth were Langwarrin, Doreen, Rowville and Keysborough.”
Mr White said that 12 of the top 20 suburbs for price growth were in outer Melbourne suburbs.
“This signals continuing buying demand for homes in the city’s outer suburbs, as home buyers look for value further from the CBD in the current market,” he said.
According to the figures, the median house price in Melbourne’s outer ring reached $525,500 over the first quarter of 2016 – an increase of almost $3,000 compared with the previous quarter.
Speaking to Smart Property Investment, Cate Bakos, buyer’s advocate and director of Cate Bakos Property, said that if an area is “booming” due to affordability factors, this may not be enough to sustain long-term growth.
“If an area is booming because it is affordable for people in the lower income brackets, it doesn’t mean that it’s poised for consistent strong performance – it means that right now it’s experiencing a lot of housing developments,” she said.
“But that isn’t a capital growth driver for the long term in my view.
“Affordability as a growth driver is not the kind of growth driver that we’d get excited about. Lifestyle and amenity is what we go for.”