Suburb spotlight: Preston coming into its own with prices surging

Older, more established suburbs like Preston in Melbourne’s north have come into their own as popular residential areas.

And not without good reason: they are within easy commuter distance of the city, they are near work opportunities and public transport is laid on. Northland shopping centre is not far away.

On top of this, there’s a huge variety of existing housing stock, many Californian bungalows and brick veneers, and a new influx of apartments and units. Something for everyone it seems...

The result of this popularity has been a surge in median prices for houses and units.

Australian Property Monitors’ chief economist, Dr Andrew Wilson, said Preston was one of the more popular ‘growth’ areas in Melbourne’s northern ‘middle ring’ of suburbs.

It’s still a growth suburb as regards property prices and it is still ‘gentrifying’, but it was one of the better performing suburbs in Melbourne this year,’’ he said.

Preston had 211 sales in the six months to November 30 for a 75% clearance rate (as against Melbourne’s 71%). The median house price is $630,000 and median unit price $400,000 – both higher than the Melbourne median - and 5% higher than three years ago.

House prices are up 9.6% over the past 12 months and unit prices 6.4%.

Wilson said the former working class and migrant suburb was attracting buyers because it was still affordable and because of its established infrastructure, especially public transport. ‘’It doesn’t have the rows of quaint Victorian houses of some neighbouring suburbs but it does have a good spread of housing stock.

‘’It’s ticking all the boxes with rising prices, an increase in sales and higher clearance rates. Prices will probably moderate next year but Preston will still offer good value to buyers.’’

At the 2011 Census, Preston had a population of 29,925 – and a host of real estate agents.

Senior salesman at Peter Markovic Real Estate, Angelo Scambiatterra, said the Preston real estate market was staying high – welcome news for vendors. He said property values in the suburb, 9km from the CBD, had ‘’skyrocketed over the past two years although they are still a bit lower than in neighbouring suburbs Thornbury or Northcote’’.

Sales volumes are ‘’a bit down at the moment – from 300 to around 240 properties on the market’’, but demand is still strong.

The suburb has many appealing residential locations with wide, tree-lined streets and a stock of double fronted Californian bungalows on 500-620 square metre blocks. Prices range from $700,000 up to $1 million.

Many areas are magnets for developers, such as along St Vigeon’s Road, where five established family homes ‘’all in a row’’ were knocked down and replaced by four town houses on each block. There’s also been a lot of townhouse redevelopment along The Broadway and in the side streets off Cheddar Road, as well as an enormous amount in neighbouring Reservoir.

‘’The bottom end of the market is around $400,000-$450,000 and the top end is in the Oakhill estate off High Street where prices are $750,000-$1 million,’’ Scambiatterra said.

‘’Most residents are owner-occupiers: families with children at local schools. There are a lot of people in the 30-50 year age group with most wanting to live there rather than simply invest.

‘’Darebin Council does a good job and there are low rates and good infrastructure.’’

Wendy Jeng, director of YPA estate agents in Preston, said State Government guidelines on higher density development would make it easier for developers to buy and rebuild apartments and townhouses in the northern growth corridor – from Preston through Reservoir and Epping.

‘’Since the guidelines’ release (in July) the market has picked up with greater interest – especially from developers but also from prospective home buyers wanting houses,’’ she said. ‘’Most vendors seem to be getting used to the new rules and evaluating their position before acting.’’

Jeng said Preston had long been a migrant suburb – first with Greeks and Italians post-war and later attracting Asians - mostly Vietnamese, Chinese, Indian and Korean. A cosmopolitan atmosphere added to its appeal.

She believes high property prices will remain steady next year, as will interest rates. The low dollar – which has been making it easier for foreign home buyers and especially the Chinese in other areas – won’t have much local effect. ‘’We don’t have many overseas buyers in Preston.’’

https://www.ypa.com.au/listings_residential_id/15693/property_details.html

https://www.propertyobserver.com.au/data/suburb/preston-vic

staylor@propertyobserver.com.au