Australian banks have tightened lending protocols, but this does not stop buyers from procuring suburban homes. “For sale” signs are vanishing as buyers vie for residential properties. Although most buys are for actual residential homes and not short-term investments, some suburban residences still receive an almost 30 per cent growth in median value.
Residential Prices Set to Stabilise
The residential slump isn’t over, but there are signs of stabilising prices, even growth, in suburban areas. Residential homes and land that you can buy in suburban areas such as Bacchus Marsh had the highest growth in median value in the past year at 29.8 per cent, outpacing Melton, which received 26.3 per cent growth. The suburb of Kurunjang also had remarkable median value growth at 24.7 per cent. Melbourne house values are predicted to fall another 6 per cent in 2019 for a 15 per cent total, according to reports by Moody’s and CoreLogic. However, some suburban properties are already experiencing substantial growth in property value. Suburban properties also figured prominently in auctions sales, with five suburbs totalling close to 2,800 properties going under the hammer. Reservoir led the five suburbs with 684 homes going up for auction. Craigieburn had 610, and Glen Waverley had 509. The suburbs of Richmond and Mt. Waverly also had comparable numbers for auction at 486 and 479 respectively.
Buying vs Renting
Suburban property prices are down, and interest rates remain low, making it an ideal time to invest in residential homes. In some places, it will cost you less to straight out buy a property than to just merely rent. Buying a median-priced residential property in Diggers Rest will save you more than $100 a month compared to renting. This is assuming that you have paid a 20 per cent deposit and availed of a variable home loan rate not surpassing 3.7 per cent. Several other suburbs have comparable situations. Even in Bacchus Marsh, the suburb with the highest growth in median property value, you’d only need to spend an extra $200 to buy a residential property compared to renting. The rising population and growing demand for housing will also increase rent prices. Hence, buying a suburban property while the prices remain low is a pretty good investment.
The growing suburban population has led to infrastructure spending meant to facilitate the needs of suburban residents. Improved road access to the Central Business District (CBD) and other places of employment have made suburban residences a viable option for young single workers and newlyweds. Long commutes are a thing of the past, and most of the popular suburban locations will have commute times to CBD, from 30 minutes to an hour. The number of schools, shops, and entertainment venues in suburban districts has also grown to meet the demands of a growing populace. Suburban residents now have more access to daily necessities, services, and entertainment. Moreover, the city proper is only a few minutes away.
The housing market is expected to stabilise in 2020, and prices will begin rising once again. Investing early can save you a few dollars or even earn big money. Several suburban properties have already doubled their market values, and future growth is all but a given.