An off-shore developer recently paid $7.2 million for a 1612-square-metre site in Doncaster, setting a new land record for the suburb. The site on 1027-1029 Doncaster Road had a square meter price of a whopping $4,467. How is it Doncaster along with other eastern suburbs such as Glen Waverley and Mt Waverley witnessed these crazy sales prices, and will the trend last through 2016?
Doncaster of course is relatively close to the city which makes it a very attractive place to commute from. The rising number of apartments along Tram Road and Doncaster Road has set a new trend for living for both the young and the downsizer market. Along with townhouse developments of varying densities, apartments are popping up everywhere along the main roads, generally in close proximity to activity centres.
The amount of foreign investment in Doncaster is significantly on the rise and most of the investment flows from China; these investment savvy land dragons are still keeping their eye on the area. As such Architeria Architects are designing more and more townhouse developments as well as apartments in the eastern suburbs as there seems to be an ever increasing demand for good architecture and great living in these areas.
Doncaster is also considered as a good location from a Feng Shui perspective as it is positioned high, looking down at the CBD. It is the 'Head of the Dragon' and with its close proximity to Box Hill and Westfield Shopping Centre, it's a very favourable place to invest and live in. No doubt that overseas demand has driven up property prices and homeowners in Doncaster have been enjoying gains, as have residents in Mt Waverley and Glen Waverley. These three suburbs along with Balwyn are the eastern suburbs most in demand.
Michael Morris, sales representative at Appleby Real Estate is in agreement that the eastern suburbs are rocking. For many years a market leader in the eastern and south eastern Melbourne metropolitan areas, Appleby Real Estate is well known and highly regarded, having regularly delivered its services to consecutive generations of local families and businesses.
Michael Morris took some time off his busy schedule to answer some of my questions regarding the real estate market in Melbourne's eastern suburbs and also my curiosity in relation to the future of apartment living in general.
How is the current market in the eastern suburbs compared to Melbourne in general?
We have seen strong growth Kate – Appleby’s is breaking records in our area and have not seen any decline. Suburbs such as Croydon, Bayswater, Boronia, and Ferntree Gully, for example, have been, and still are, affordable. So the slight slump in the overall market hasn’t impacted our local area because of continued demand.
Which suburbs do you see as the ones where prices are increasing?
Again, we are seeing steady growth in Croydon, Heathmont, Bayswater, Boronia and Ferntree Gully, because property is still affordable, which makes these areas popular for developers, investors and first home buyers. There is certainly money to be made in these suburbs.
There is a lot of talk about a bubble in the property market that may burst. What are your thoughts on this?
My thoughts are the same as they have always been, and what I have seen in my twenty years of living in this magnificent city; Melbourne is the most liveable city in the world with the best people in the world; 70,000 people move here every year. At any given time we are short some 7,000 homes for these families.
My first Burwood property was purchased for $180,000 in the late 90s which we thought was outrageous. We sold it ten years later for $770,000. It is now back on the market having been subdivided with plans and permits for a three level townhouse in the back for $1.6million.
So in an almost twenty year life cycle it has gone from $180,000 to $1,600,000. I have talked to couples who couldn’t believe paying 25K for their home in Blackburn thirty years ago. It is now worth $2,500,000. That’s Melbourne for you.
There was recently a sale in Doncaster where the price per square metre went beyond the $4,000 mark. Will we be expecting more crazy sales prices like this triggered by auctions?
Possibly. It all depends on the location and what you can do with it. Developers have their numbers figured out well and truly ahead of an auction. If it works for them financially they’ll pay whatever.
Chinese developers and investors are often blamed for prices rallying and there are worries that first time home buyers can’t afford to buy in to the market due to this. What are your thoughts on this?
Between APRA and the Federal Government I think we’ve seen more opportunities for first-time home buyers in the last couple of months. However, it is often these Chinese developers and investors that are creating the affordable first-time home purchases such as apartments, units and townhouses, for young individuals and couples to buy. If first-time home buyers purchased off the plan they would find very affordable housings purchases and save a lot of money in all markets.
Will Melbourne be following in the footsteps of other big cities in America and Europe where apartment living is dominating? With this I mean, do you think that the new generation of people and with the increasing migration, people may consider trading their backyards in to apartment living instead.
My first two homes in Melbourne were apartments, one in Southbank and then the other in South Melbourne, and I loved it! But after your third child you need a little more room to move. My wife and I plan on moving back to apartment living when our kids are grown. Coming from the San Francisco Bay Area I concur that apartment living has its benefits and will continue to grow in popularity with all generations and cultures.
With Melbourne’s public transport system, walk ways, bike paths and parks apartment living is truly enjoyable not to mention imperative for our sustainable growth. It is amazing to live in a city where car ownership is optional without diminishing your lifestyle. Apartment living is our future.
Who is the typical client looking for apartments in the Eastern Suburbs?
We have such a diverse clientele: We have over three thousand landlords on our books who are always looking for their next investment property. We have mums and dads who are looking to downsize and would like an apartment that they can enjoy for themselves yet leave without concern as they travel the world.
We also have young singles and couples looking for their first home, not wanting to pay rent. The demand for quality projects is astounding and it is our experience that there is not enough supply currently to meet that demand.
What defines a good apartment?
I have seen excellent apartments and I have seen poorly designed apartments, and I have sold and lived in both. My advice to developers: Be generous with your floor plan in terms of size and you will sell more units, quicker.
Location is key but also considers vantage points. If one is going to live in an apartment, at least ensure it has a view. And if you can bring some pizazz to the foyer, common area, gym, pool, gardens, and make it truly exciting your owner-occupiers and tenants will be your best advertisers. As one successful builder once quipped; I don’t build anything I wouldn’t live in myself. We never get to market his product. It sells before we can.
It sure sounds like we have just touched the tip of the iceberg when it comes to apartments. The eastern suburbs will continue to grow, evolve and have more to offer its population. We at Architeria Architects are excited to be part of this continuous growth and contributing with our fresh design approach, creating great living.