Wyndham City south-west of Melbourne 'pumping strongly': Hotspotting's Terry Ryder
Few markets across Australia are pumping as strongly as the market in the Wyndham City LGA in the south-west of Melbourne.
Areas that offer affordable homes are attracting increasing attention in Melbourne and the Wyndham City area is now the most active market in the metropolitan area, with key suburbs Hoppers Crossing, Point Cook, Tarneit, Werribee and Wyndham Vale achieving a combined 3,500 house sales in the past 12 months.
All of these suburbs have seen significant increases in sales volumes in the past 12-18 months and strong price growth has resulted. Most have had median price growth well above 10% in the past 12 months.
Wyndham City sits in the corridor between Melbourne and Geelong, and is one of Australia’s leading population growth areas. It has good transport links to central Melbourne (helped by the $5 billion Regional Rail Line), plenty of major jobs nodes, solid infrastructure and some of the Melbourne region’s most affordable housing.
It has suffered from oversupply issues in the past, thanks to over-zealous developers – but currently vacancy rates in the key suburbs are low. There is a strong need for new dwellings, with the LGA’s population rising around 10,000 per year.
Given all of that, it’s no surprise that the City of Wyndham is a place for young families. Those aged from 20–44 represent 42% of the population, compared to the state average of 36%, while children aged 0–19 make up 31%, also higher than the state average of 24%.
Wyndham City has a diverse economy, with a number of key industries, including:-
- industrial and technology precincts (including major industrial estates at Laverton North which generate $7.3 billion in annual economic activity);
- several large retail precincts, including Pacific Werribee, Point Cook Town Centre, the Werribee CBD (which has both retail and commercial space) and Old Geelong Road, Hoppers Crossing (a precinct of 250 homemaker stores and bulky goods retail);
- tourist attractions such as Werribee Park Mansion, the Open Range Zoo, the State Equestrian Centre and the Point Cook RAAF Museum; and
- agriculture, including vegetable growing and grazing (Werribee South has one of Victoria’s leading market garden areas).
One of the features of the municipality is the number of significant jobs nodes. These include RAAF bases at Laverton and at Point Cook, the Werribee Agriculture & Food Technology Precinct, the Werribee Park Tourism Precinct and the Melbourne Water Western Treatment Plant.
The Agriculture & Food Technology Precinct is the largest in Australia, covering 800ha and specialising in food, food packaging and bio-technology. The LGA has 3,000ha of market gardens in the Werribee South area and is considered the broad leaf vegetable capital of Australia.
Property development and construction is a major part of the economy. Dwelling approvals have risen from fewer than 1,000 a year before 1999 to consistently above 2,300 a year since 2001.
Melbourne’s strong run of house price growth has rippled out to the outer-ring suburbs and now many of the growth locations are in the cheaper areas, led by the suburbs of Wyndham City.
The relatively-low house prices are enticing buyers to the area. The median price for a house in Tarneit, 30km west of Melbourne’s CBD, is $470,000 – compared to Ringwood East, 30km east of the CBD, where the median is $830,000.
Consequently, sales activity in Wyndham has been rising, led by Hoppers Crossing, Truganina and Werribee. Annual sales in Hoppers Crossing grew from 468 in 2014 to 630 in 2015, according to realestate.com.au, and have continued on a steady incline since.
This has been accompanied by price growth. In SQM Research’s latest Housing Boom and Bust report, Melbourne’s south-west was identified as the nation’s best-performing region for house price growth.
With 972 house sales in the last 12 months, Point Cook is one of Melbourne’s busiest markets and its median house price has grown 16% to $585,000 in the past 12 months.
Elsewhere across the LGA, median house prices remain mostly in the $400,000s, despite strong growth in the past 12 months.
The longer-term growth rates (average annual rises over 10 years) are 6–7% per year for most suburbs in this precinct, while yields are generally in the 3.6% to 4.3% range.
All of this, together with the recent decreases in vacancy rates, makes Wyndham City a market worthy of consideration by property investors.
The market is dominated by standalone houses (84%), but the mix is changing as the ratio of units-to-houses increases. Since the 2011 Census, the market share of units has increased from 10% of total dwellings to 16%, according to the 2016 Census.
In suburbs like Werribee and Hoppers Crossing, units typically sell in the low $300,000s, with typical rental yields around 5%.
Terry Ryder is the founder of hotspotting.com.au
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