Families flock to Melbourne’s northern suburbs: hockingstuarts Rob Elsom
GUEST OBSERVER
Traditionally, parents of Melbourne have settled their clan in the eastern suburbs, close to many of the city’s best schools and facilities. But as prices across Melbourne soar, especially in the inner east, affordability is a big issue for young families.
We’re seeing a number of young couples come to the inner north where a family home in the likes of Brunswick, North Melbourne or Preston comes at a modest price point of $700,000 to $800,000. Plus, families are close to the CBD and employment opportunities, as well as the lifestyle amenities abundant in the north, including restaurants, parks, cafes and cultural activities.
However, the trade-off for this buyer market is the limited schooling options. The number of secondary facilities in the inner north are few and far between. While mums and dads typically prefer to live close to schools and travel to the city to work, we’re now seeing the opposite where parents are within minutes to the CBD but are having their children commute to schools in the eastern suburbs.
This has meant that the demographic of buyers in the inner north has shifted. This season, we’ve witnessed a magnitude of families on the hunt for a home for the next 15 to 20 years. As such, family homes or large townhouses like 19 Ford St in Brunswick are being snapped up at auction.
As families start to see the merits of the north, the local market has spurred along - especially when compared to the end of last year.
The difference between then and now has no doubt been interest rate cuts, which have stimulated a tremendous amount of confidence in the market and created the best market conditions we’ve seen for years.
Clearance rates are strong, sitting at over 75% (although the likes of Fitzroy, Carlton and Fairfield have been above 85%) and annual growth figures show properties in Melbourne’s inner north have grown by an average of 5.5%.
The influx of new buyers and rate cuts have also helped boost the apartment market, which is performing terrifically. Step back to 2014, the apartment market had moderate growth, but wasn’t performing as we’d hope. Come February this year, the reduction in the cash rate clearly spurred on more first home buyers – particularly young couples who are expecting a child – to dip their toes in the market. We’ve seen a rush of this cohort looking for inner north apartments which are not only affordable, but located in the heart of the action for youngsters.
Looking forward, there’s predictions interest rates will remain low. However, whether these changes will continue to drive up demand for property is uncertain. Taking into consideration other factors at play in the economy – such as high unemployment rates and job cuts across various sectors in Victoria – it’s hard to forecast what the market will do in six months’ time.
For the next three months at least, a perfect storm has brewed for buyers and sellers alike. There’s a great selection of stock, strong appreciation, low borrowing conditions and ultimately great outcomes for vendors in Melbourne’s inner north. And it’s no doubt becoming an area for young families to call home.
ROB ELSOM is director of hockingstuart Brunswick, Carlton, North Melbourne and Northcote.
