Britt made a temporary move, but she loved the area so much she stayed
Britt Johnson and her family moved to Parkdale for a temporary investment opportunity, but loved the suburb so much they ended up staying long term.
It’s among a string of Bayside suburbs that recorded some of Melbourne’s strongest property price growth in the three months to April, data from CoreLogic has revealed, bucking the trend of Melbourne’s softening housing market.
Parkdale saw house price growth of 3.2 per cent in the three months to April, CoreLogic data has revealed.Credit: Simon Schluter
Houses in the inner-east and units in Melbourne’s inner-city suburbs have also had strong price increases, as buyers chase “bridesmaid suburbs” while others make a bid to escape the rental market.
The increased cost of housing in Bayside hasn’t deterred buyers, with investors and owner occupiers alike flocking to suburbs like Parkdale for its beachside lifestyle and the promise of a good return on property purchases.
Johnson and her husband Rhys moved into one Parkdale townhouse and rented out its neighbour, and have now listed the rental for sale. They have already seen a flurry of interest from buyers, many of whom are hoping to break into the Bayside market.
“I think (Parkdale) is a really competitive suburb to get into. It tends to also be one that once you live here, you don’t tend to leave. My 95-year-old grandmother has actually lived here for the last 70 years,” Johnson said.
“There’s a lot of people wanting to buy and stay in the area and once you’re here, you either want to upgrade to a bigger home or downsize to a smaller home, depending on which age and stage of life you’re at. I think it’s just a really amazing place to want to raise a family so that’s why I think it’s really popular.”
With beach access, schools and infrastructure plentiful in Parkdale, Johnson and her husband decided to invest in Parkdale because they foresaw its strong growth potential.
Johnson said the local market has “held on strong” since her family moved to the area.
“(Moving here) was meant to be temporary, but we just quickly fell in love with the suburb and decided that it was where we wanted to call home and raise our kids,” the mother-of-three told The Age.
“We’ve also bought another property in the area because it will hold its value, and it will be a sought after area and I can’t see that changing.”
The median cost of a house in Parkdale has increased by 3.2 per cent to $1.56 million in three months.
Neighbouring suburbs Edithvale and Aspendale Gardens had increases of 3.9 and 3.8 per cent, respectively.
CoreLogic head of research Tim Lawless said most of the suburbs that have risen in the last three months were located in fairly affluent markets where the cost of a house was at or above $1.3 million.
“These areas tend to be bucking the trend and maybe this is a sign that buyers around that upper end of the income range are probably less impacted by cost-of-living pressures and high interest rates,” he said.
While many of these suburbs were in more expensive areas, Lawless noted they might be more affordable than neighbouring sought-after destinations.
“What you might describe as the bridesmaid suburbs, where they’re the next best thing, there might be this rippling of demand away from the absolute top end of the marketplace towards suburbs that are adjacent but a little bit more affordable. I wouldn’t be surprised if that’s that’s a trend we’re seeing in the marketplace.”
Lawless added that units in many inner-city areas had experienced growth as a result of first-home buyer activity.
Buyers are seeking out properties in ‘bridesmaid suburbs’. Credit: LUIS ENRIQUE ASCUI
Prahran’s median unit value has risen by 3.6 per cent to $549,472 in the three months to April. The median unit value in South Yarra rose 3.1 per cent to $617,690.
Biggin & Scott Stonnington director Michael Tynan said unit prices in these inner-city suburbs were being driven up by people wanting to get out of the rental market.
“If you look at what one bedroom (apartments) are currently being leased out for – $500 to $550 a week in rent – it’s cheaper to buy something instead of leasing a one bedroom around this area,” Tynan said.
“If you look at the one bedroom market, it’s going quite well at the moment because people don’t want to lease because it’s so expensive ... because of how hot the rental market is, it’s assisted in driving up that marketplace.”
In Melbourne’s inner-east and inner-south, prices have been driven up by local buyers keen to stay in the area, Buxton Real Estate Mentone director and auctioneer Mathew Cox said.
“Once sellers see those great results, they then jump on the bandwagon as well and go: well, if they’re getting that for that, let’s put ours on the market too,” he said.
“So there’s been a lot of people upsizing within the same locale, helping to drive up those prices.”