Bright Starters: Broadmeadows, Dallas, St Albans among best bets for first-home buyers in Melbourne
Melbourne suburbs shaking off stigmas are among the best places for first-home buyers to get into the property market with likely price growth ahead, according to a new report. SEE THE LIST.
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Melbourne suburbs shaking off stigmas are among the best places for first-home buyers to get into the property market with likely price growth ahead, according to a new report.
Broadmeadows, Dallas and St Albans are among the best bets for first-timers to enter the housing market, according to Canstar’s inaugural ‘Bright Starters’ report provided exclusively to News Corp, which flags the top 10 suburbs for Melbourne and regional Victoria.
The report considers the most affordable quarter of the market, with potential for price growth.
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Hotspotting expert and report co-producer Terry Ryder said any old stigma of suburbs such as Broadmeadows was irrelevant to buyers.
“I think it’s easy to get a bad reputation but it’s harder to lose it,” he said.
“And quite often I’ve found over the years that areas transcend their bad reputations, but the perception in the minds of some people hasn’t changed despite it being a long time since they’ve been there — or they’ve never been there.”
Affordability, infrastructure, amenities and nearby jobs were what locals and buyers saw.
YPA Estate Agents Glenroy sales manager David Taylor said Broadmeadows’ ill-reputation had not been deserved for some time and the area was gentrifying and homes improving.
“There’s a stigma attached to the name, but people buying there are getting pretty good value for money,” he said.
“Though we’re starting to get $700,000 prices in Broadmeadows more commonly, and some owners are quite surprised when we give them a price guide.”
‘Bright Starters’ were identified using key metrics including sales volumes, quarterly price growth, vacancy rates, infrastructure, and proximity to work and amenities.
The research also factors in buying in as little than less than two and a half years, with room in the budget to account for rising interest rates and higher loan repayments.
Unit markets in Brunswick East, Preston and Cheltenham joined house markets in Caroline Springs, Cranbourne, Epping and Narre Warren on the list.
Apartments in these areas were less exposed to oversupply than the inner city and “upwards pressure” on prices was expected as more people turned to medium and high density living.
Bendigo suburbs California Gully and Long Gully were among regional Victoria’s top 10 “bright starters” for houses, with Propertyology also naming Bendigo as “Australia’s most reliable property market” this week, citing the median house price only declining there three times over the past 30 calendar years — and each time by only 1 per cent.
Lesser known Latrobe Valley town Churchill was another “bright starter”, buoyed by Federation University’s Gippsland campus and nearby government work in Traralgon.
Mr Ryder said the Latrobe Valley’s economy was “absolutely pumping” and despite the closure of coal power stations touted by some as the “death” of the area, the unemployment rate had dropped and it had transitioned “from the old economy to the new very successfully”.
Barry Plant executive director Mike McCarthy said buying in an area with development planned such as transport, schools and shops could add “significant value” when it came time to sell — and “the old adage of buying the worst house in the best street still holds true”.
“The real value is in the land – houses can always be renovated, extended or even replaced. If you buy a house that’s perfect, it’s hard to add value to it,” he said.
“Many first-home buyers have reaped the rewards of a little hard work and imagination with homes that needed some TLC.”
Canstar money expert Effie Zahos said the best bet for getting into the market in a reasonable time period was by purchasing a “stepping stone” property and buying with head, not heart.
“It may be a unit and it may be in a different suburb than originally planned,” she said.
First-time buyers were better off using a smaller deposit and getting into the market sooner rather than waiting years to scrape together a 20 per cent deposit, according to Ms Zahos.
Potential gains in a rising market could outweigh lender’s mortgage insurance usually paid when a deposit was less than 20 per cent, Ms Zahos said, but first-home buyers can also apply for the federal government to guarantee loans of as little as 5 per cent and dodge that cost.
Economist Saul Eslake has shared concerns some could end up in a “negative equity” situation if they did this and prices fell — as is expected for Melbourne as a city.
Mr Ryder said considering the lower percentile of homes rather than the median was important as first-home buyers bought “the housing equivalent of a Toyota Corolla”.
“First-home ownership is about making sacrifices and compromises,” he said.
“The reality is that unless you have rich parents you’ll probably also have to accept that your first home is not going to be your dream home.”
Melbourne was ranked 13th out of the 14 capital city and regional state markets considered nationally in the report, with regional Victoria number six.
MELBOURNE’S TOP 10 ‘BRIGHT STARTERS’
Suburb, median price, 1-year growth, median rent, initial outlay (10% deposit), time to save on single income, time to save on dual income, monthly repayments
Broadmeadows, $580,000, 5%, $360, $59,560, 5 yrs 9 mths, 2 yrs 9 mths, $2,360
Brunswick East (units), $585,000, 12%, $410, $60,072, 5 yrs 9 mths, 2 yrs 10 mths, $2,380
Caroline Springs, $680,000, 5%, $420, $88,924, 8 yrs 6 mths, 4 yrs 2 mths, $2,767
Cheltenham (units), $675,000, 11%, $430, $87,067, 8 yrs 3 mths, 4 yrs 1 mth, $2,747
Cranbourne, $590,000, 18%, $375, $60,584, 5 yrs 10 mths, 2 yrs 10 mths, $2,401
Dallas, $505,000, 10%, $340, $51,885, 4 yrs 11 mths, 2 yrs 5 mths, $2,044
Epping, $630,000, 6%, $400, $71,250, 6 yrs 10 mths, 3 yrs 4 mths, $2,564
Narre Warren, $670,000, 13%, $405, $85,230, 8 yrs 1 mth, 4 yrs, $2,726
Preston (units), $630,000, 26%, $390, $71,250, 6 yrs 10 mths, 3 yrs 4 mths, $2,564
St Albans, $660,000, 10%, $360, $81,615, 7 yrs 10 mths, 3 yrs 10 mths, $2,686
REGIONAL VICTORIA’S TOP 10 ‘BRIGHT STARTERS’
Suburb, median price, 1-year growth, median rent, initial outlay (10% deposit), time to save on single income, time to save on dual income, monthly repayments
Bairnsdale, $340,000, 19%, $360, $34,999, 3 yrs 11 mths, 1 yr 11 mths, $1,376
California Gully, $375,000, 26%, $350, $38,581, 4 yrs 3 mths, 2 yrs 1 mth, $1,518
Churchill, $275,000, 28%, $300, $28,347, 3 yrs 1 mth, 1 yr 7 mths, $1,109
Long Gully, $365,000, 31%, $360, $37,557, 4 yrs 2 mths, 2 yrs 1 mth, $1,478
Maryborough, $330,000, 13%, $255, $33,975, 3 yrs 9 mths, 1 yr 10 mths, $1,330
Mildura, $360,000, 16%, $360, $37,046, 4 yrs 1 mth, 2 yrs, $1,457
Moe, $295,000, 23%, $300, $30,394, 3 yrs 4 mths, 1 yr 8 mths, $1,189
Sebastopol (units), $305,000, 25%, $285, $31,417, 3 yrs 6 mths, 1 yr 9 mths, $1,230
Shepparton, $350,000, 11%, $340, $36,022, 4 yrs, 2 yrs, $1,417
Warrnambool (units), $365,000, 57%, $330, $37,557, 4 yrs 2 mths, 2 yrs 1 mth, $1,478
Source: Canstar & Hotspotting
ALL POSITIVE
Troy Swannie has just bought his first home in Broadmeadows and sees all the positives as the suburb shakes off its traditional negative sentiment.
“I grew up not too far away in Oak Park so I knew the area somewhat well and the house itself is right across from Broadmeadows Valley, which I think is quite nice,” he said.
“There are big blocks there, my house is on 715sq m, for a decent price close to the city, with good transport links, and there’s a bunch of schools in the area, Broadmeadows Leisure Centre, so good amenities and good nature.”
Mr Swannie, 31, was renting in Kensington and noted the area he bought into was gentrifying with a new wave of young buyers.
“I have a lot of friends now that have bought in the last few years around Glenroy and Oak Park, which was generally a middle-class area but now the houses around there are all around $1m and Glenroy has now gentrified,” he said.
“When I was growing up Broadmeadows had quite a stigma around it but I think that’s going with the spread of Melbourne.”
Saving the deposit “was a little bit of a hustle”, particularly with prices soaring over the past year.
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