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Melbourne Best suburbs continues to outperform- South Yarra Top the list


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The Age
MARC PALLISCO
June 28, 2010 – 4:06PM

The Valuer-General median house price figures offer the most accurate data on the market, writes Marc Pallisco.

For true real estate aficionados, the official figures released this month by the Valuer-General into median house prices couldn’t have come sooner.

The government report, covering the most tumultuous economic period since the 2001 terrorist attacks, relies on the State Revenue Office for information and captures almost every house, unit and land sale recorded for the 15 months to December 2009.

By comparison, statistics produced by industry and private groups such as the Fairfax-owned Australian Property Monitors and the Real Estate Institute of Victoria, rely predominantly on real estate agents for information and are not as comprehensive.

Unreported sales and unreported prices—not always included in the industry-produced data—are captured by the Victorian government via Notice of Acquisition statements, which are required by law to be completed by a purchaser.

With a wider pool of sales to analyse, the Valuer-General can include almost every suburb on best-performing ‘‘league tables’’.

Many privately controlled research groups cannot detail strongly performing suburbs if too few sales were registered in the period to make a median figure statistically reliable.

The unfortunate thing about the Valuer-General’s reports—other than that you’ll be slugged a fee to get one—is that they are released some five months after rivals have captured the headlines.

The REIV typically captures between 70 and 80 per cent of sales, and is among the first to release its research, free of charge, about three weeks after the end of a quarter.

Despite the lag, the comprehensiveness and accuracy of the government figures deserve another headline.

Saturday Domain takes a look at the best-performing suburbs, in regard to median house price for the year ended December 2009, citing the Valuer-General’s official statistics.

South Yarra

Median increase (December ’08 quarter-December ’09): 66 per cent

Median house value at December ’09: $1,353,000

Ritziest pocket: Royal Botanic Gardens precinct between St Kilda Road and South Yarra train station

How it compared to the neighbours in that time:

Richmond up 17.6 per cent to $750,000

Toorak up 13 per cent to $3.05 million

Prahran up 37.3 per cent to $948,000

South Melbourne up 28.3 per cent to $1.026 million

It’s hard not to notice the building boom in South Yarra. Shops, offices and hotels are replacing former industrial sites, catapulting the already-fashionable precinct into what buyers’ advocate Michael Ramsay of Michael Ramsay Property calls ‘‘Melbourne’s best suburb’’.

Buyers here are prepared to pay Toorak or Brighton prices for houses that are often on small blocks.

Earlier this year, a Kensington Road house on 4366 square metres sold for $12 million to $13 million, reportedly setting a suburb record.

It’s not unusual, however, for two-storey, balconied terraces to sell for more than $3 million now— unheard of 10 years ago.

Lower Plenty

Median increase (December ’08 quarter-December ’09): 51.9 per cent

Median house value at December ’09: $875,000

Ritziest pocket: Streets off Old Eltham Road near the Heidelberg Golf Club, the north side of Rosehill Road,

Lakeside Estate.

How it compared to the neighbours in that time:

Montmorency up 26.3 per cent to $512,000

Eltham up 3.8 per cent to $550,000

Templestowe up 8.1 per cent to $847,000

Viewbank up 13.5 per cent to $555,000

It doesn’t get more ‘‘city meets country’’ than some parts of Lower Plenty.

The suburb is full of grand houses on huge lots, many with an outlook over parks and rivers. Yet a trip to town takes just 15 minutes on the Eastern Freeway.

The exclusive enclave, a hideout for many of the north-eastern suburb’s richest and highest-profile identities, was one of the strongest performing regions in median value growth last year.

The strength of the market is set to be tested next month when a palatial 930-square-metre mansion at 7 Beckett Court will be sold after an expressions-of-interest campaign.

It is expected to fetch up to $4 million, which would set a record for the area, according to selling agent Rocco Montanaro of Morrison Kleeman.

Mr Montanaro says Lower Plenty remains popular because of its big blocks, without breaking the bank.

‘‘When you compare what $2 million to $3 million buys in Ivanhoe, or Kew, the value of homes in Lower Plenty and the lifestyle that home offers comes to the fore,’’ he says.

Carnegie

Median increase (December ’08 quarter-December ’09): 50.9 per cent

Median house value at December ’09: $870,000

Ritziest pocket: Holywood Grove, McPherson Avenue, Mile End Road.

How it compared to the neighbours in that time:

Malvern East up 2.9 per cent to $993,000

Bentleigh East up 21.5 per cent to $693,000

Ormond up 17.3 per cent to $880,000

Caulfield South up 28.8 per cent to $857,000

Carnegie is comfortably on track to becoming one of Melbourne’s many ‘‘million dollar suburbs’’.

Filled predominantly with understated houses, Carnegie shares its postcode with Murrumbeena and Glen Huntly, which also reported above-average growth for the year to December 2009.

Ray White Carnegie director Matt Hurlston says the suburb is popular with young families who see the value of Carnegie compared with some of its more expensive neighbours, including Malvern East and Brighton East.

Carnegie prices are preserved by the presence of universities in Melbourne’s south-eastern suburbs, including Swinburne and Monash, as well as proximity to the CBD, Mr Hurlston says.

Heidelberg

Median increase (December ’08 quarter-December ’09): 45.3 per cent

Median house value at December ’09: $872,000

Ritziest pocket: Eaglemont

How it compared to the neighbours in that time:

Macleod up 11.7 per cent to $546,000

Rosanna up 16.1 per cent to $666,000

Bulleen up 3.8 per cent to $663,000

Ivanhoe up 15 per cent to $920,000

Heidelberg Heights up 29.7 per cent to $516,000

Heidelberg shares a Melway page with Kew, so it’s no surprise values have surged recently, reflecting that proximity. It has big blocks, good transport, hospitals and access to top schools in nearby suburbs.

South of Bell Street,Heidelberg has some of the northern suburb’s best real estate, in the leafy, hilly pocket of Eaglemont.

Earlier this month, a record for the precinct was set when an investor paid a speculated $5.5 million for a five bedroom house in The Righi.

North of Bell Street prices fall dramatically. Heidelberg, like Heidelberg West and Heidelberg Heights, has a high component of public housing, and attached duplexes that are not straightforward to demolish and rebuild.

Black rock

Median increase (December ’08 quarter-December ’09): 43.1 per cent

Median house value at December ’09: $1,219,000

Ritziest pocket: Opposite the beach, streets off Bent Parade

How it compared to the neighbours in that time:

Sandringham up 22.6 per cent to $1,113,000

Cheltenham up 9.3 per cent to $648,000

Beaumaris up 14.4 per cent to $1.03 million

Few Melbourne addresses offer the combination of factors that makes Black Rock popular.

The quiet beach hamlet, between Sandringham and the Ricketts Point Marine Sanctuary, was the best performing bayside suburb last year in median house value growth.

Black Rock, Sandringham and Beaumaris all became ‘‘million dollar precincts’’ last year. Buyers advocate Karin Mackay of Australian Property Buyers describes Black Rock as the quiet achiever throughout the recent economic slowdown.

‘‘It is close to a train station, is close to the beach, offers a great lifestyle, and land sizes are excellent,’’ she said.

‘‘Black Rock, in some instances, is cheaper than Brighton East and Hampton East, and attracts first and second home buyers who can’t afford Brighton, Sandringham and Hampton.’’

Bad performers

It wasn’t all beer and skittles last year. Median values in some suburbs went backwards, but this could say more about flaws with the median methodology than demand.

Diamond Creek down 6.4 per cent to $440,000

Fairfield down 7.9 to $700,000

Narre Warren North down 19.6 to $468,000

Safety Beach down 11.4 per cent to $395,000

Sandhurst down 12.8 per cent to $435,000

Upper Ferntree Gully down 13.6 per cent to $331,000

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