The Trend is Your Friend
Examining the trends that are currently occurring in the Melbourne property market can give buyers, particularly developers, an insight into what features to consider for greater capital growth and rental yields.
Cohen Handler’s buyers agents are on the frontline everyday speaking to property buyers about the most sought after features and locations that is driving the Melbourne property market. Whether you are a residential property buyer or developer, being aware of the following trends can all assist in finding a great property with growth potential.
- ‘Walkability’ to public transport – Increased traffic congestion, and Melbourne’s significant population growth is adding value to properties within walking distance of trains, as well as other public transport options.
- Melbourne residents happily choosing smaller blocks of land − Living on smaller blocks of land in well designed properties is seen as a viable option. Most popular are properties that maximise the effective utility of the available space and offer architectural or historical merit – ideally both. Also important to potential buyers is being within walking distance to public transport and a neighbourhood that offers the ‘latte lifestyle’. A recent example was $1.3 million paid for a 64 square metre block – the size of a shed − in Albert Park with approved plans for a single dwelling, three-level townhouse. Cohen Handler’s mantra that land should be viewed from a ‘qualitative’” rather than a ‘quantitive dimension is gaining strength.
- The shrinking backyard and the rise of the ‘communal backyard’ − As the price of land per square metre rapidly increases, backyard sizes are rapidly decreasing. As a result, ‘walkability’ to a nearby park is becoming a ‘must have’ rather than a ‘nice to have’ for many buyers, particularly those with small children.
- The state government planners are winning – Where possible, planners have sought to concentrate population growth in middle and inner ring Melbourne suburbs rather than suburbs further out. As part of this urban planning, developers have been allowed to buy houses on large blocks and replace them with apartment blocks, multiple townhouses or dual occupancy. According to the Australian Bureau of Statistics, between 2006 and 2016 around 400,000 more people have moved into Melbourne suburbs within 20km of the CBD with nearly 200,000 of those living within 10km from the CBD.
- Multi-purpose spaces – With the rising cost of real estate, more people are driven by necessity to smaller property and are searching for rooms that serve a dual purpose or make clever use of existing space, e.g. Euro laundries in bathrooms of houses as well as apartments, or retractable or hidden desk areas within a living room rather than a dedicated study.
- Parking alternatives – With parking space at a premium, car stackers and turntables are becoming more popular. There is also an acceptance of street parking as an everyday option − especially when land is $10,000 a square metre making a 6 metre x 3 metre garage or parking space really expensive!
- Energy efficient home design. We would like to think that this is because people are becoming more environmentally aware, however we suspect it’s more about coping with rapidly increasing energy prices.
- Commercial products being used in residential fit-outs – For aesthetic reasons, we are seeing commercial scale windows and doors, and impressive commercial kitchen fittings being included in homes.
Here to stay
What definitely isn’t a passing trend is the consistent demand in Melbourne for heritage properties − particularly Victorian and art deco. Timeless in their style, these types of properties are particularly sought after if they have renovation potential. There is an increasing demand for well located 1960’s properties − an era when architects were conscious of bringing in light and incorporated generously proportioned rooms. Many view the build quality in this period as generally superior to modern housing.
The buyers agents at Cohen Handler are knowledgeable about all current property trends and can help you find the right property at the right price for you. Contact us now.