Melbourne North Property Market Update
The northern suburbs housing market remained relatively flat throughout 2012 and early 2013 due to an oversupply of new homes, land packages and vacant allotments in new estates, such as those found in Greenvale, Doreen, Craigieburn and Mernda. Since 2002 regular movement of the urban growth boundaries has contributed to this oversupply.
The lack of infrastructure in many new estates can lead to isolation issues which is potentially a contributing factor to buyer resistance in these areas. An example of a regional area that has seen recent renewed buyer confidence is Craigeburn with a 330 million dollar shopping and community precinct underway. Coupled with improved schools, rail and road the area is attracting young families and first homeowners.
Low interest rates, together with a drop in property values by approximately 10 per cent, makes investing in some northern suburb areas attractive. The region has been a favourite for first home buyers and entry level investors due to the affordable housing options with many homes being sold below the median house price.
The housing market entry-level rental properties are available in the outer northern suburbs where rental returns are strong. However for strong long-term capital growth, investors should focus on inner northern suburbs such as Carlton, Essendon and Thornbury.
New apartments in the inner north are currently in oversupply due to a large number of medium to high density apartment developments under construction. This has been evident in areas such as Essendon and Travancore where local real estate agents have reported difficulties re-selling apartments at prices matching the original off-the-plan purchase price.
Greville Pabst, CEO