FORMER “ugly duckling” outer suburbs that were considered undesirable just five years ago were among Melbourne’s most sought-after locations for property buyers in 2018, according to local real estate searches.
While long-standing favourite, Richmond – known for being close to the city centre and next to the famous Melbourne Cricket Ground (MCG) – remained top of the most searched neighbourhoods, it was joined by some more unlikely candidates.
Outer suburbs such as Berwick, Sunbury, Pakenham, Point Cook and Werribee followed close behind, notching between 245,000 to 373,475 clicks each on real estate listing site realestate.com.au.
While they would not have been considered desirable areas just a few years ago, a combination of factors is driving Melburnians to look outside the city.
“Half the [top 10] list are those traditionally seen as poor cousin suburbs or ugly ducklings,” Advantage Property Consulting director Frank Valentic told News.com.au.
“Because of affordability issues and population growth, there’s been a big cultural and demographic shift. People are willing to go out a bit further.”
The improvement of infrastructure out to the further suburbs has also made them more accessible.
Despite a housing market decline in 2018, Melbourne is still among the most expensive cities in the world and owning property is out of reach of many young buyers.
The Demographia International Housing Affordability Survey found median prices have outpaced incomes by a factor of three since 2001, placing Melbourne in the top 5 least affordable property markets globally.
While the appeal of the outer suburbs is growing, raising the median house price in these areas, they still remain well below the greater Melbourne average.
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People are also tiring of city life, choosing instead to look to coastal areas, such as Mornington and Mt Eliza, which rose in popularity over the last year.
“There are a lot of people not just seeking holiday homes, but permanent homes,” Valentic said.
“People are commuting back and forth to work. They’ve forfeited the busy Melbourne inner city lifestyle for a sea-change.”
While the outer suburbs may be on the rise, the old favourites are still proving hard to beat when it comes to amenities and being close to the action.
Richmond, within walking distance of central Melbourne, again topped the list for most searches and with property on the downturn, it’s opening up these highly competitive neighbourhoods to buyers.
Shane Oliver, chief economist at AMP Capital, predicted a 20 percent price fall in both Sydney and Melbourne over 2018. A number of factors contributed to the dismal outlook, including poor affordability, reduced credit, a tougher refinancing environment for existing borrowers and a fall in foreign buyers.
While this is bad news for homeowners, it’s good news for first-time buyers and young professionals.
“People have moved back to Melbourne’s premium areas now the market’s slowed,” realestate.com.au chief economist, Nerida Conisbee, told News.com.au.
“It’s giving them more confidence to look around those aspirational suburbs.”