Oversupply figures paint distorted housing picture of outer-Melbourne suburb of Clyde amid Melbourne’s 55,000 listings

Oversupply figures paint distorted housing picture of outer-Melbourne suburb of Clyde amid Melbourne’s 55,000 listings
Oversupply figures paint distorted housing picture of outer-Melbourne suburb of Clyde amid Melbourne’s 55,000 listings

The outer south-east Melbourne suburb of Clyde is not the epicentre of a so-called oversupply of houses in the city’s outer suburbs, but instead the result of new housing projects coming to market at the same time in what was farmland just two years ago.

Figures compiled by SQM Research show that the number of residential listings in postcode 3978 (Clyde, Clyde North and Cardinia) have risen a whopping 316% to 1,270 over the year to June, the biggest increase of any postcode as pin-pointed by The Sunday Age, which taken at face value would suggest a major problem.

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The new house and land package suburb is about 50 minutes south east of Melbourne and was one of a number of market gardens localities rezoned in 2010.

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Local estate agents operating in the area are not concerned.

Paul Rogers from O'Brien Real Estate Narre Warren is selling blocks of land in Villawood’s Pasadena community in Clyde and says agents are looking for new stock all the time to satisfy demand.

Pasadena is a 338-lot residential community near Casey Fields, which launched in July last year. The project offers blocks from 388 square metres up to 668 square metres, priced from around $220,000 to $245,000.

Other local projects include Simonds Homes Cascades on Clyde Estate and Stockland's Selandra Rise in Clyde North.

Rogers says he clocked up 35 residential sales over the past month – “a pretty good figure”.

He says house sales have been around the $330,000 mark but he has recently sold a house-and-land package on a 1.2-hectare block for $1.1 million.

“There are a lot of vacant land and house and land packages not yet build, which is probably where the big rise in listings comes from,” says Rogers.

Another issue, he says, could be that developers are advertising blocks of land as house-and-land packages due to confusion around stamp duty rules, which he says is a grey area.

SQM Research managing director Louis Christopher says the listing figures do not include vacant land, but do include house and land packages.

"We look at them pretty closely," he says. "These are listing that are advertised for sale."

Rogers says he is selling to a broad cross-section of people, including those who are downsizing, older buyers, young couples and upgraders.

He says the suburb has a developing business hub of its own and is also well-serviced by trains into the CBD.

In April a new train station opened at Cardinia on the Pakenham line, which Rogers says is a “one-hour relaxed” commute into the city.

Mark Leonard from First National Real Estate Neilson Partners Narre Warren, who is selling new four-bedroom houses in Clyde around the $370,000 mark, says things have slowed down in winter, but he expects a pick-up in summer.

He says because Clyde is a new estate, the SQM figures could be “statistical abnormalities” because there has been a lot of land developed over the past six to 12 months.

Most buyer interest, he says, comes from second- and third-home buyers, with a little bit of first-home buyer interest ahead of the Victorian government $13,000 first-home bonus ending on June 30.

In addition to train and bus services, the suburb has a nearby shopping centre and primary and secondary schools.

“It could do with some more bus services,” says Leonard.

He says a price of betwen $400,000 to $450,000 would secure a three- or four-bedroom house with a small garden.

These comments are given weight by a March quarter 2012 report by Oliver Hume, which shows that Cardinia only has about six months of land supply compared, with more than a year and a half of supply in Mitchell - Wallan / Beveridge area to the north of Melbourne and more than 10 months’ supply in Melton to the west.

According to Oliver Hume, there are 10 new residential projects underway in Cardinia, comprising 10% of all projects in Melbourne, with an effective median land price of $177,000.

The UDIA and HIA have also rejected claims of a glut in residential listings in outer suburbs.

Clyde’s status was highlighted in SQM Research figures which show a 6.1% monthly jump in Melbourne residential listings to over 55,000 in June with 35,000 of these listings on the outer fringe.

After Clyde, the suburb with the second biggest rise in listings in the year to June 30 was Epping to the North, with a 168% rise to 1,260 followed by Taylors Hill, Sydenham and Hillside (post code 3037) in the north west with an 84% rise to 1,081 listings, the Sunday Age reported.

Hoppers Crossing, Tarneit and TRUGANINA (post code 3029) in the West have the highest number of listings at 4,048 – a rise of 54% for the year to June.

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Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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