What a start to the year 2020 we have all had! It was the beginning of a new decade so new resolutions, plans and ideas were made and it was all not meant to be when we were all upset by the arrival of Coronavirus (Covid-19).
Most of Australia and New Zealand handled the virus relatively well with the exception of Melbourne of course as us Melburnians always feel the need to be different from the other states! As I write this post, we are halfway through our second lockdown and infection rates seems to be coming down but the death count seem to show no signs of slowing down. One can only hope that it reduces sooner rather than later.
Where does this leave property investment in Australia and in particular Melbourne?
Work from home seem to be the new normal of working currently and many seem to flirt with the idea of moving to regional towns such as Geelong, Ballarat, and Bendigo just to name a few but will there be enough of this group of people to have an impact on property prices? What would happen if you had to change jobs? Would your new employer be kind enough to offer you the same generous work from home concessions as your previous employer did? Do people who currently work from home even want to continue working from home??
The idea of moving to regional Victoria has its own set of benefits. For $700,000 you could buy yourself a nice four bedroom Victorian styled cottage on a quarter acre block in Ballarat East. A similar styled house on a similar block of land with that proximity to the city centre would probably cost you upwards of $3M or more! With such price disparity, one can understand the attraction of going regional.
However, no man is an island. We are after all a community centric bunch. How would you feel about living so far away from your network of friends and family? What about schooling options for your children as they grow up?
My guess is that the future demand will lie somewhere in the middle. The idea of moving further out would be explored as I can get more “property” per dollar but am going to draw the line at the hour mark for commuting time.
With millennials (currently the largest demographic group) finally in family and baby formation age, the demand for 3 to 4 bedroom homes on decent blocks of land will be in high demand over the next 10 years. Areas such as Sunshine West, Deer Park, Ardeer, Epping, and Frankston should start seeing more action moving forward. These are areas where you could still buy a 4 bedroom home on a decent block of land for under $650,000. It may not be brand new but definitely liveable and renovations can be done over time.
These are all established areas with train stations and freeways that takes you to the city within an hour. (No promises when we are driving and back to regular Melbourne traffic!)
With interest rates at all time lows, banks eager to lend moving forward and no signs of interest rate rises within the next few years, buying a property makes absolute sense and only a matter of time before the suburbs mentioned above start rising in value.
Money Melbourne 