Broadmeadows homes, CBD apartments Melbourne’s spring stars: Hotspotting report

Melbourne’s affordable areas, led by the City of Hume, and CBD unit market have been flagged as spring growth stars amid the downturn.

Despite an overall decline, entry-level markets are holding up strongly, and Terry Ryder’s Spring Price Predictor Index highlights plenty left in the tank in 2022 in the right spots.

The property expert has been running his leading investor website, Hotspotting, since 2006 and his price predictor index method uses sales volumes to pre-empt price movements.

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Mr Ryder said City of Hume was one of the national top 10 municipalities using this formula, with rising sales volumes a proven precursor to rising prices, and its suburb, Broadmeadows, one of Australia’s top 100 “supercharged suburbs”.

He said prices were holding up “really well” in outer ring areas like Hume, Melton and Casey.

“Affordability is a big factor … if you choose one word that’s the theme,” he said.

“The affordable parts of Melbourne are as strong as ever, and that’s not just the outer ring suburbs, but the apartment markets, but with the apartments it’s probably also lifestyle.

“Because if you can buy something affordable and get yourself an apartment for $500,000 or $600,000 in a good location in inner Melbourne, where you’re close to the restaurants and the night-life and all the lifestyle factors that inner Melbourne offers, then that’s a pretty good buy for a lot of people, and maybe for younger people who want to be connected to that lifestyle, that’s quite an attractive option.”

PropTrack economist Anne Flaherty believed there was growth left in “certain areas” but, overall, rapidly rising interest rates had whacked the market.

“It’s really constrained buyers, who can’t afford to borrow as much as they could six months ago,” she said.

“Having said that, the areas in which people need to borrow more will feel a greater relative hit from higher interest rates, so the effect in affordable areas relative to interest rates might not be so great.”

PropTrack’s latest forecast is for overall Melbourne property prices to have fallen between 3 and 6 per cent between December 2021 and December 2022, with another decline of between 9 and 12 per cent in the 12 months to December 2023.

Melbourne’s median property value is $838,000, according to PropTrack.

Advantage Property Consulting director Frank Valentic said, broadly, “A and B-grade properties” were performing the best as the Melbourne market declined.

“The ones in the blue-chip locations with the bells and whistles (are holding up). If it’s on a major road or if it’s missing a bedroom, (has) a three-bedroom, one-bathroom floorplan or doesn’t have the right configuration they’re the ones that are struggling,” he said.

Properties that needed work were not highly sought, amid materials shortages and rising costs.

“Renovated, modern four-bedroom, two-bathroom, two-living zone family homes with family-friendly backyards continue to be in short supply — we just don’t have enough of them in Melbourne,” he said.

Mr Valentic said lifestyle factors including pools, outdoor entertaining areas, and leisure-friendly locations remained sought after.

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scott.carbines@news.com.au

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