How to buy into a million-dollar Melbourne suburb for six-figures

BUYING a house in million-dollar suburb on a six-figure budget might sound like a dream in Melbourne’s booming market.

BUYING a house in million-dollar suburb on a six-figure budget might sound like a dream in Melbourne’s booming market.

But new data from the Real Estate Institute of Victoria suggests it’s possible for buyers to do so in inner-ring postcodes including Elsternwick, Ivanhoe, Essendon and Richmond.

The figures reveal there can be hundreds of thousands of dollars difference between a suburb’s typical house and its smaller ones.

REIV chief executive Geoff White said the data showed a way to “live alongside million-dollar neighbours on a relatively boutique budget” without giving up on the Great Australian Dream of owning a house.

Source: REIV

A median-priced two-bedroom house in Elsternwick cost $929,200 in the year to June — almost $650,000 cheaper than the suburbs’s overall median of $1,577,500.

Half the buyers who snapped up a two-bedroom house in Ivanhoe in this period did so for under $921,000, despite the northeastern suburb enjoying a median house price of $1.395 million.

There was a $465,000 difference between Essendon’s overall and two-bedroom medians, $445,000 in neighbouring Moonee Ponds, $441,000 in Caulfield South, and $425,000 in Port Melbourne.

Hawthorn’s the way to go for buyers with a bit more cash — its median two-bedroom house cost just over $1 million, but was still $1.05 million cheaper than the overall median.

Mr White said the smaller house market allowed buyers to get into a desirable suburb, earn capital growth and equity, and eventually upgrade.

Purchasing a petite house didn’t mean sacrificing much land in some suburbs, he said — while the price difference between the two-bedroom and overall median in Ivanhoe was 38 per cent, the average land size was only 14 per cent smaller.

“Some people say you should buy the worst house in the best street. What you really should do is buy a good house in the best street that’s a bit smaller,” he said.

But agents in suburbs recommended by REIV including Ivanhoe, Ascot Vale, St Kilda and Richmond said buyers had better get in quick, with “fewer and fewer” six-figure houses hitting the market.

“In the next few years, you’ll only be able to get apartments for that price,” Nelson Alexander, Ivanhoe’s Tania Johnston said.

Jellis Craig, Richmond, agent Travis Keenan said single-fronted terraces still offered a way into his suburb: “That’s the typical Richmond story — move into a single-fronted two-bedroom Edwardian, have a little one, then have another one on the way, and all of a sudden need to upsize.

“They often want to move to a bigger home in Richmond because they’ve fallen in love with the area.”

Katie and Dave Martel planned to do just that, with a baby soon to join 15-month-old Beau in their growing family, but are instead auctioning their charming terrace at 41 Clifton St at 11am on Saturday, August 13, to move interstate.

Buyer interest in the two-bedroom has been between $800,000-$850,000, but with Richmond in high demand, the price could fly higher.

ON THE MARKET NOW

30 Ross St, Elsternwick

2 bed, 1 bath, 2 car park

Price guide: $900,000-$990,000

Sale details: Gary Peer Caulfield North auction, September 3

2 Peers Street Richmond.

2 Peers St, Richmond

2 bed, 1 bath, 1 car park

Price guide: $780,000-$850,000

Sale details: Biggin & Scott Richmond auction, August 27

3 Norfolk St, Moonee Ponds

2 bed, 1 bath, 1 car park

Price guide: $720,000-$790,000

Sale details: Nelson Alexander Ascot Vale auction, August 27

336 Bambra Road Caulfield South.

336 Bambra Rd, Caulfield South

2 bed, 1 bath, 1 car park

Price guide: $850,000-$935,000

Sale details: Gary Peer Caulfield North auction, September 3

95 Bradshaw St, Essendon

2 bed, 1 bath, 1 car park

Price guide: $750,000-$800,000

Sale details: Nelson Alexander Essendon auction, August 27