Research from real estate agent PRD Nationwide suggests greater infrastructure spending in Melbourne North-West suburbs is driving up property prices. Areas that once had a less-than-great reputation have recently been turned into property hot spots.
In the recent report, suburbs like Sunshine West, Heidelberg Heights and Fawkner were named the top-three investment areas for affordable houses. With large public infrastructure spending scheduled for those areas, buyers and sellers can expect further price growth.
Not surprisingly, reputation and proximity of schools seem to have a certain impact in local property prices. Public schools that academically compete against private colleges are preferred. As an example, when the NSW Department of Education announced a $60m investment into new inner-Sydney schools, real estate saw a small boom in catchment areas.
Areas neighbouring popular suburbs are experiencing a spill-over effect as buyers seek larger land and affordability. Buyers are re-thinking suburbs that were once undesirable, and as the wave of urban development keeps rising, they have no reason not to, says Andrew Wilson, chief economist for Domain Group.
Terrence Duffy, lead researcher from the Port Phillip Publishing Library says that “wherever you see improved services and infrastructure, rents and land price must rise. Announcements of civic improvements and new schools bring unexpected gains for those who own.”
In one of Melbourne’s western suburbs, a house in a 700 square meter block is being sold for at least $700,000 at the moment, while just two years ago the very same property would have been on the market for around $400,000.
Buyers and sellers must be aware of all these factors when entering the real estate market. The problem really lies with those who rent – in Duffy’s words, “they simply pay higher rents.”