Why you should buy in Melbourne’s western suburbs
Looking for more bang for your buck? Go west.
Melbourne’s west has been the nation’s strongest growing region over the past five years, realestate.com.au data reveals.
Our combined western suburbs recorded 36.9 per cent growth in median house price from June 2014 to June 2019.
The region led Hobart and Melbourne’s southeast, which posted 36 per cent and 35.9 per cent growth respectively.
The median price of a house in the west went from $412,698 five years ago to $565,000 in June this year.
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The realestate.com.au data shows seven of the top 10 best performing regions are in Victoria.
Experts say population growth and relative affordability are driving growth in the west.
“There are more employment opportunities as more businesses move out there, there is new infrastructure, new schools and transport options have increased and are improving,” said Advantage Property Consulting director Frank Valentic. “These things are only going to keep pushing people to these areas.”
The Housing Industry Association released Australia’s top hot spots for building approvals and population growth earlier this year.
The Rockbank-Mt Cottrell area in Melbourne’s west took the honours, with population growth of 59.4 per cent, coupled with $224.2 million worth of building approvals, in the 2017/18 financial year.
Mr Valentic said Melbourne had 12 of the nation’s top 20 growth suburbs, including the western suburbs of Point Cook, Truganina and Tarneit.
The realestate.com.au data shows the highest median house price growth has been recorded in new suburbs over the past five years, led by Aintree, Weir Views and Fraser Rise, all in the City of Melton. Their price growth ranged from 218 per cent in Aintree, where the median price is $617,000, to 136 per cent in Fraser Rise, where the median is $598,000.
Diggers Rest, Melton South, Melton, Werribee, Hoppers Crossing, Laverton and Truganina round out the top 10 growth suburbs in the west, each with growth of more than 50 per cent.
Melton is the most affordable of these suburbs, with a median price of $390,000.
Mr Valentic said Melton was also the fastest growing municipality in Australia.
“It is getting 17,000 new residents a year, which is massive, and the council is adding two schools a year to keep up,” he said.
“Seventeen years ago it had a population of 50,000, now it has tripled and is 150,000.”
Barry Plant Sunshine director Jason Allen said affordability was another key factor for the west.
Mr Allen said the west had been affected by the market downturn like the rest of Melbourne.
“Two years ago families were getting beaten by developers, but now all of a sudden they have got back in the market,” he said.
“It was getting unaffordable and now it has dropped back to a level where it is affordable and buyers are back.”
Families and first-home buyers were predominantly taking over the market, Mr Allen said.
“Young families are coming in and demanding more local schools and people start to see it as an area which is affordable and has potential,” he said.
Realestate.com.au chief economist Nerida Conisbee said affordability was a huge factor driving people west.
“There is a lot of urban revitalisation happening in the inner west,” Ms Conisbee said.
“Footscray and Sunshine are historically working class suburbs but they are now attracting young people, it has been a longtime coming.
“And young people can still afford to buy there.”
She said housing quality in Melbourne’s west had also improved.
“There are some nice new homes that are lifting the value,” she said.
Mr Valentic said buying a home in a Bayside suburb would typically cost $2.5 million, whereas houses could still be picked up for $600,000-$700,000 in western suburbs like Ardeer and Sunshine.
“People are gravitating towards the west due to affordability,” he said. “For a two-bedroom apartment in Prahran you could buy a house in Albion, Deer Park or Hoppers Crossing.
“People are getting large blocks of land and bigger homes compared to the south and southeast.”
Mr Valentic said he would not have advised buying in the west 10 years ago but had since changed his mind.
“We are now buying lots in Ardeer, Spotswood and Footscray, they are getting gentrified but are still affordable,” he said.
“They are getting good growth but haven’t boomed yet.”
The stigma was also slowly changing, Mr Valentic said.
“It takes a while to change, like all areas you are still going to have your grungy elements there, but more people are more willing to go over the (West Gate) bridge now,” he said.
WHY I WENT WEST
A property journey over 20 years has led one investor to Melbourne’s west.
Shan Manickam started buying property in Sydney in 1988 before moving to Melbourne a couple of years later.
“I have bought property all over Melbourne, in Clifton Hill, St Kilda, and more recently in Spotswood and St Albans,” Mr Manickam said.
“When I first started everything was about Bayside. Now it is unaffordable, whereas the west is undervalued.
“Everything has its day and I don’t think it has had its day yet. There’s oodles of opportunity out there.”
Mr Manickam said while there was a stigma attached to the west, the schools, transport and new infrastructure on offer were great drawcards.
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He bought an investment property in St Albans about 18 months ago.
“It was unsexy, I’m a big fan of finding unsexy and undervalued assets and making them sexy and valued,” he said.
He bought the two-bedroom villa as part of a consortium with five to six others.
Money in a kitty went to the aesthetic features and then they could do whatever they wanted inside their own villa.
Mr Manickam said he was now on the lookout for a house with a block of land in Melbourne’s west.
“I want to be able to subdivide and develop, there are plenty of large blocks out there,” he said.