Good signals and plenty of room for growth in Melbourne suburbs

Often the only way to figure out what’s really happening in real estate is to find a quiet room, shut out all the hype and media static, and spend a few hours looking at the cold hard numbers.

If you haven’t done that, you can be forgiven for thinking Melbourne had a rampant boom last year. The reality is that the Victorian capital had a solid but moderate year overall.

Three major research sources agree that the median house price rose 7% or 8%. They include the Australian Bureau of Statistics, which records a rise of 7.9% in 2013.

Keeping in mind that the three previous years were negative ones, the overall picture is one in which prices have done very little since 2009.

So there’s plenty of room for further price growth this year and indeed many precincts around the metropolitan area are emitting growth signals.

Most of them are middle-market or bottom-end areas, where a combination of affordability, solid infrastructure and good transport links make them attractive to all kinds of buyers.

An outstanding feature of metropolitan Melbourne is how widespread the growth regions are. Municipalities scattered around the city region have markets ranging from solid through steady to strong. But for the greatest concentration of future hotspots, head south-east from the CBD.

And, no, I don’t mean the millionaire suburbs of the inner south-east. I’m referring to more distant municipalities where affordable areas have rising markets. These include the municipalities of Dandenong, Casey, Kingston and Mornington Peninsula.

The City of Casey is the individual star, with seven suburbs with growing sales activity. Leading suburbs are Cranbourne East, Cranbourne North, Fairfield, Hallam and Berwick. Most are locations with the median house prices in the $300,000s.

The nearby City of Dandenong is another affordable area with a number of growth markets, including Dandenong, Noble Park, Springvale, Keysborough and Dandenong North.

Elsewhere in Melbourne, the outstanding regions are the municipalities of Brimbank in the west and Whittlesea in the north. In Brimbank I’ve identified nine suburbs with growth markets. This area has great growth prospects because of its range of affordable locations, good transport links and major spending on new infrastructure, including an $800 million transport hub.

The City of Whittlesea, a cluster of affordable growth suburbs in the north of the Melbourne metropolitan area, has seven growth suburbs. This is another area with strong infrastructure, good transport links and proximity to jobs nodes.

Affordability, infrastructure and jobs: it’s one of real estate’s power combinations.

The major risk hanging over the Melbourne market is the inner-city oversupply, but you already know that. If you don’t, you’re obviously living in China, which is where Melbourne developers will be trying to sell all those surplus apartments.

Terry Ryder is the founder of hotspotting.com.au.

You can contact Terry via email or on Twitter.