THE lure of Melbourne’s traditional blue-chip suburbs is paying dividends for property owners in neighbouring areas.
Prices for units in Mentone and houses in Ashburton galloped ahead in the past five years, on the back of spillover demand from their pricier neighbours.
Mentone’s units and townhouses climbed a hefty 60.5 per cent or $187,743 during that time, with Ashburton’s housing market close behind with a 59.2 per cent or $435,000 increase, according to RP Data.
However, traditional favourite Kew topped the table in dollar terms, adding $655,000 to the median house price since 2009. It was a
59.5 per cent rise to a new $1.755 million median.
RP Data housing market specialist Robert Larocca said growth of 50 per cent or more was a very strong increase in a five-year period. There were 18 suburbs in Melbourne that beat the 50 per cent benchmark.
Though houses in Sandhurst were the top-performer with 69.2 per cent growth, this was likely due to new homes being built in the developing area, rather than underlying value growth, Mr Larocca said.
“It’s the inner south and the inner east where we’ve seen the most significant increases in value,” he said.
“The scarcity factor means people are having to pay over the average to buy in.”
However, middle ring suburbs, particularly to the south and east, could start matching growth rates in the inner suburbs in coming years, Mr Larocca said.
Kew real estate director Chris Ewart, of Christopher Russell, said price growth in his suburb had been particularly strong in the past 18 months.
Land values were escalating, with developers actively buying older homes on large blocks, he said.
“The population is still increasing and people cherish living in the inner suburbs, with all the infrastructure that comes with it,” Mr Ewart said.
Local agents put the price hike for units and townhouses in Mentone down to buyers looking for the bayside lifestyle without the Brighton price tag.
Buxton, Mentone, director Wesley Belt said young buyers were becoming more prominent in the area as they were priced out of bayside neighbourhoods closer to the CBD.
Units were becoming a popular choice as the suburb’s house prices reached the million-dollar mark, he said.
Kim D’Souza is a longtime Mentone resident who has recently made the switch to a townhouse.
The neighbourhood’s well-regarded schools were a drawcard for her two daughters, Vali and Tiselle.
Ms D’Souza paid more than $700,000 to secure a three-bedroom townhouse on Balcombe Ave in June.
Houses within her budget would have needed extensive renovations, making a townhouse a more practical choice, she said.
The potential for price growth was another crucial factor.
“The way prices have gone up in Mentone in the past few years is pretty amazing,” Ms D’Souza said.
Hocking Stuart, Mentone, agent Simon Wendt said units in Mentone attracted a range of buyers, keeping the demand high. About half his buyers came from suburbs closer to the city and moved out to find better value for money.
“If they can sell in those areas and do well, then they can get themselves into a very good suburb here with some spare change left,” Mr Wendt said.
Top money makers over five years
- Houses in Sandhurst: 69.2% or $227,000
- Units in Mentone: 60.5% or $187,743
- Houses in Kew: 59.5% or $655,000
- Houses in Ashburton: 59.2% or $435,000
- Units in Canterbury: 59.1% or $307,499
Source: RP Data, year to August 2014.