1. OCTOBER2016 n APIMAGAZINE.COM.AU n 8382 n APIMAGAZINE.COM.AU n OCTOBER2016
I
f Sydney’s property market is virtually
one big modern wedding party in
2016, with little difference between
neighbouring suburbs’ buy-in
prices, Melbourne’s is still a traditional
bridal affair.
Its star suburbs (brides) are more
expensive – by 10 to 20 per cent or
more – than their supporting suburbs
(bridesmaids).
This means investors who follow
gentrification ripples can still reap
big long-term capital growth rewards,
experts say.
“If you pick it (a bridesmaid) at the
right time it can be a good investment,”
says Angie Zigomanis, senior manager
residential property for BIS Shrapnel
in Melbourne.
“The easiest way to explain what
happens in markets is, if you draw a
line, say, five kilometres around a city’s
centre and wait, you will see that when
you first drew that line maybe the top
10 per cent of the entire market’s value
was contained by that circle but when
you returned, say five years later, that
circle might hold the top seven per cent
of housing.
FOOTSCRAY FACT SHEET
Footscray has a mixed supply to demand
situation. There are adequate rental
properties available to tenants, however
there is an oversupply of for-sale listings.
Discounting has been muted. Incomes
in Footscray are growing faster than the
Victoria average. The proportion of renters
to owner-occupiers is above average for
Victoria. Stock for sale levels are up by 14.8
per cent year on year.
Source:SQMResearch,www.sqmresearch.com.au(accuratetoJune 2016).
KEY DRIVERS
ff Most undervalued
suburb in same radius
from CBD
ff Great public transport links
ff Diverse population and food options
ff Affordable housing for a Melbourne inner
suburb
WALK SCORE6
: 78
Footscray is the 39th most walkable
neighbourhood in Melbourne. Most errands
can be accomplished on foot. There are
241 restaurants, bars and coffee shops in
Footscray, and residents can walk to an
average of 14 in five minutes.
n Owner-occupiers
n Mortgage holders
n Renters
n Separate house (2323)
n Semi-detached
row or terrace house,
townhouse etc (729)
n Flat, unit or
apartment (1819)
n Other dwelling (21)
47+15+37+1+A
OCCUPANT TYPE3
HOUSING MAKE-UP4
VACANCY RATES3
21+28+51+A51%
14.9%
47.4%
0.6%
37.1%
28%
2.1%
MELBOURNE
2.5%
FOOTSCRAY
POPULATION4
13,203
reputation too before its gentrification
not so long ago and now it’s a legitimate
bride of its immediate region.”
Bakos sees Footscray appealing to a
similar demographic to once-grungy
Brunswick in the city’s inner north,
which has experienced exponential value
growth since 2000.
“There are multiple train lines at its
[Footscray] hub and some of the nation’s
best Indian, African and Vietnamese
dining, and all within a tight catchment,”
she says.
“This once-stigmatised, rapidly
changing, incredibly interesting inner-
city gem has broken almost all records in
Victoria for capital growth over the last
five years.
“Its median house/unit price gap [with
Yarraville] is shrinking and I really see
that gap closing in coming years.”
Does Footscray have a bridesmaid-
in-waiting?
If you take a 15-year investment view,
buyers’ agent Tony Rindfleisch of The
Advocates points to Sunshine West, five
kilometres further to the west.
“I would almost suggest it is now the
bridesmaid to Footscray,” Rindfleisch
says. “Footscray has long been the up-
and-comer whereas Sunshine West has
not yet been widely identified as the
bridesmaid to Footscray,” he adds.
“When I look at Sunshine, if I am
asking ‘is this a suburb that will be a
bridesmaid in 15 or 20 years’ time?’ I am
seeing signs including the early stages of
gentrification, new housing getting built,
developers buying to knock down and
redevelop two or even three townhouses
on some sites.
“You can still buy a full house on a full
block for under $600,000, so if investing
for the long term, it’s a suburb with
sound prospects.”
INNER NORTH:
FITZROY NORTH AND NORTHCOTE5
Suburb Type
12
months
toJun
No.
sold
Median
price
($)
Fitzroy
North
House
2015 180 1,005,000
2016 119 1,112,000
Unit
2015 101 530,500
2016 89 545,000
Pascoe
Vale
South
House
2015 309 940,000
2016 322 1,050,000
Unit
2015 162 469,000
2016 130 500,000
1
Source:APMandSQMResearch,2
Source:realestate.com.au,3
Source:SQMResearch,4
Source:ABS2011Census,5
Source:APM,6
Source:www.walkscore.com.au.H=houses,U=units,YoY=yearonyear,SNR=statisticallynotreliable.
21%
ALL ABOUT FOOTSCRAY1
House Unit
Median price May 16 $671,750 $386,500
12-Month growth 12% 0.1%
Median rent May 16 $405 300
Rent growth (YoY) 2.5% 1.7%
Gross rental yield May 16 3.2% 4.9%
Properties sold May 16 194 162
Properties sold May 15 270 224
Average vendor discount
Jun 16
-3% -1.92%
Average vendor discount
Jun 15
4.34% 3.51%
$,000
600
400
200
07 08 09 10 11 12 13 14 15
FOOTSCRAY MEDIAN SALE PRICES2
M1
M1
M3
M2
43
46
PORT PHILLIP
BAY
Melbourne
Essendon
Toorak
Footscray
Coburg
StKilda
Brunswick
Sunshine
StAlbans
THEREALBRIDESMAIDS
OFMELBOURNEWe find out that today’s wallflower suburbs are tomorrow’s belle addresses. CAROLINE JAMES
“Its housing becomes rarer as a
percentage of the city’s total and
therefore more sought-after, and that has
an upwards effect on its values.
“As the options run out in a ‘bride’
suburb, people just start looking to the
next suburb – the bridesmaid – which
naturally attracts more people, more
investment, and we see that in its
housing values.
“That’s what we describe as the
‘ripple effect’.”
API asked industry observers
about Melbourne’s current batch of
bridesmaids and found both data
and anecdotal evidence point to
opportunities across the city.
fnTOP PICKS
INNER WEST: YARRAVILLE AND FOOTSCRAY/
SUNSHINE WEST 5
Suburb Type
12
months
toJun
No.
sold
Median
price
($)
Yarraville
House
2015 291 746,000
2016 264 810,000
Unit
2015 51 505,000
2016 78 475,000
Footscray
House
2015 271 600,000
2016 194 671,750
Unit
2015 225 388,000
2016 164 383,500
Sunshine
West
House
2015 266 405,000
2016 268 480,000
Unit
2015 17 340,000
2016 29 375,150
“It’s almost a bride in its own right,”
says Cate Bakos, of Cate Bakos Property
when asked about the suburb everyone
is talking about – Footscray – five
kilometres west of the city centre.
“Yarraville [which shares its southern
border] is known for its quirky English
heritage village and its very pretty
Victorian cottages and housing, and its
great art deco cinema, but Footscray
has a lot going on right now, a lot of
planning, a lot of new projects coming
through and I really think it could be
very popular in the future.”
Zigomanis agrees with Bakos’
assessment: “It is close to the city and
has all the necessary infrastructure in
place already and is better connected
than Yarraville,” he says.
“It does have a bit of a stigma but then
I guess Yarraville used to have a rougher
10-YEAR AVERAGE ANNUAL GROWTH5
7.7%
UNITS
7.9%
HOUSES
HOUSE
$550,000
UNIT
$335,500
Footscray
“Itsfootisvery
muchonthe
accelerator,
it’snotjustthe
poorcousinof
Fitzroyasitwas
adecadeago.”PAULOSBORNE
THE STATES n Victoria Victoria n THE STATES

2. OCTOBER2016 n APIMAGAZINE.COM.AU n 8584 n APIMAGAZINE.COM.AU n OCTOBER2016
Mentone parade
south to get closer to the private schools
so that is further reducing the available
stock on offer.”
NORTH-SIDE:
COBURG AND PASCOE VALE SOUTH5
Suburb Type
12
months
toJun
No.
sold
Median
price
($)
Coburg
House
2015 406 699,000
2016 333 775,000
Unit
2015 97 422,000
2016 98 405,000
Pascoe
Vale
South
House
2015 153 710,500
2016 169 750,000
Unit
2015 10 400,000
2016 11 510,000
Pascoe Value South is one of Bakos’s
“favourite discoveries right now”.
“Coburg [eight kilometers north of the
CBD] has featured in many a magazine
and is thriving as an appealing ‘overflow
suburb from Brunswick’, which is six
kilometers from the city centre, but for
those who can’t fathom a $1 million
price point for a period family home,
neighbouring Pascoe Vale South offers
pretty period bungalows at about a 20
per cent discount,” she says.
Bakos stresses, however, that
investment buys must be close to the
train station.
“It doesn’t have a station in easy
walking distance (for the whole suburb)
but it does sit right on CityLink, which is
convenient for driver commuters to the
airport and CBD.”
BAYSIDE (SOUTH):
SANDRINGHAM AND MENTONE/PARKDALE5
Suburb Type
12
months
toJun
No.
sold
Median
price
($)
Sandringham
House
2015 223 1,210,000
2016 160 1,490,000
Unit
2015 142 507,500
2016 77 655,000
Mentone
House
2015 248 725,000
2016 179 880,000
Unit
2015 178 475,000
2016 137 470,000
Parkdale
House
2015 199 781,666
2016 206 930,000
Unit
2015 71 482,500
2016 64 485,250
Nineteen kilometres from Melbourne’s
CBD, sandy Sandringham is extremely
popular thanks to its short train line
commute (30 minutes to Flinders Street
Station), period homes and beachside
exercise trails.
However, it comes at a cost – its
median house price has crept to $1.49
million, up $280,000 this year, according
to APM data. This price tag puts it
out of reach for most investors, who
should look further south, past equally
expensive Black Rock and Beaumaris, to
the west side of Mentone and Parkdale,
according to market watchers.
These bridesmaids offer the same
beachside lifestyle, but have comparable
properties about 20 per cent cheaper
than their northern bride, which makes
for excellent buying.
“I love Sandringham, and everyone
gravitates there for good reason,”
Bakos says.
“But only 12 minutes down the road
there is Mentone, which also offers
rail connection, great shops, beautiful
beaches, amazing schools and tree-
lined streets.
“The only thing [Sandringham]
trumps Mentone on is distance from the
CBD, but at a serious discount, Mentone
must be a serious consideration.”
Rindfleisch includes Parkdale,
Mentone’s neighbour to the south, in his
pick of bayside bridesmaids with strong
value growth clout.
“Sandringham, Black Rock, Beaumaris
are all AAA suburbs yet just down the
road you have the same coastline, nice
little villages and a train line to town but
for a much lower price.”
INNER SOUTH:
ELWOOD AND ST KILDA EAST5
Suburb Type
12
months
toJun
No.
sold
Median
price
($)
Elwood
House
2015 191 1,300,000
2016 165 1,22,500
Unit
2015 333 600,000
2016 285 629,000
St Kilda
East
House
2015 135 961,500
2016 103 1,361,500
Unit
2015 211 513,750
2016 208 524,000
According to Bakos, some buyers
are “flocking” to this area, about eight
kilometres south of the city looking for
apartments and units.
But while Elwood is squarely bride
material, with its elevated price point,
beachside location and village, it’s got
two strikes against it that boost the
appeal of its inland rival, St Kilda East,
she says.
“Elwood has no train line, tram only,
so that is one thing against it and also,
you are on a canal but it means some of
its lovely art deco buildings are subsiding,
which always rings alarm bells for me;
you really need to check what you are
buying before committing.”
Referring to edgy St Kilda East as “the
Brunswick of the south”, she says its
location, just over Brighton Road, offers
eclectic cafes, bakeries, bars and striking
art deco housing too.
“The beach wedding [in Elwood], to
keep the bride theme going, does have
longevity from a capital value growth
perspective for those who can afford to
buy and hold it but St Kilda East has a
train station… and apartments in St Kilda
East are offered at a significant discount,
under $500,000 for a two-bedroom
compared to $600,000-plus in Elwood.”
INNER EAST:
RICHMOND AND COLLINGWOOD5
Suburb Type
12
months
toJun
No.
sold
Median
price
($)
Richmond
House
2015 415 955,000
2016 325 1,100,000
Unit
2015 386 541,250
2016 321 550,000
Collingwood
House
2015 86 740,500
2016 88 880,500
Unit
2015 266 590,000
2016 185 555,000
Richmond has been drawing buyers
to its stylish single-fronted Victorian
terrace this decade while neighbour
Collingwood has been plagued by bad
stigma and concerns about the East-
West Link Tunnel, Bakos reports.
However, the tide is turning and
Collingwood should be on the investor
map, Bakos says.
“Now the tunnel is on hold and the
entry/exit ramp locations are widely
known, Collingwood holds appeal
and lesser mystique around the risk,”
she says.
“It’s also just so close to the city,
offering such great cafe/pub experience.
“Yes, it does have edgy Smith Street
and it does have a bit of a crime issue,
but it’s got this interesting architectural
mix of terraces, single-fronts and some
new development, so it is a hot suburb
to consider.
“East-West Link is off the table and
Richmond is this giant car park in
my opinion; parking has become a
real problem.
“If it was my money, I would prefer
go to a ‘wedding’ in Collingwood
right now.”
OUTER EAST:
RINGWOOD AND LILYDALE5
Suburb Type
12
months
toJun
No.
sold
Median
price
($)
Ringwood
House
2015 333 640,000
2016 305 773,000
Unit
2015 118 435,000
2016 86 490,100
Lilydale
House
2015 363 480,000
2016 300 575,000
Unit
2015 31 345,000
2016 32 380,000
“Ringers” is not what it used to be.
Its wedding day is here; the once rough
railway suburb 23 kilometres east of the
CBD is now a fully-fledged bride of the
middle ring, Rindfleisch says.
The $700 million Eastland Shopping
Centre redevelopment, Costco arriving
in 2013 and the train station’s $65
million revamp have fuelled its capital
value ascension.
Developers continue to scramble to
nab any centrally located housing site,
for which they expect to pay $1 million
or more.
“Ringwood has been the flavour
of the month for the past two years,”
Rindfleisch says.
“Costco is the eighth biggest retailer
in the world and they don’t put their
money into dead areas.”
But what if you can’t buy into postcode
3134? Look further down the Lilydale
line and you may find an answer 13
kilometres away.
“Lilydale is the next big thing, the
bridesmaid to Ringwood in my opinion.
“It’s on the train line and trains beat
tram lines every time.” API
According to data prepared by
Secret Agent for API, average prices
of properties in Fitzroy North (four
kilometres north of the CBD) grew by
8.6 per cent per annum between 2011
and 2016 compared to 5.9 per cent in its
immediately north neighbouring suburb
Northcote. Median prices for all sales
were $955,000 and $790,000 respectively.
The buyer agency’s founder Paul
Osborne says Fitzroy North’s quality
family-size properties are tightly
held and this underpins its continual
value growth.
But there is “no doubt” Northcote,
to its immediate northeast, “has a
bright future”.
It’s recorded very strong sale price
results in the past 12 months and is
“becoming a destination in its own
right” thanks to its thriving local
shopping and dining strip on High
Street, Osborne says.
“Its foot is very much on the
accelerator, it’s not just the poor cousin
of Fitzroy as it was a decade ago,”
Osborne says.
“Northcote had really cheap rents five
or six years ago so a lot of young new
people have moved in and created this
great village full of interesting things,
traders, cafes and bars and so you are
actually seeing this vibrancy dragging
people from Fitzroy North over for their
nights out.
“You also see Northcote High School
moving up the public academic ladder
too, which has resulted in more local
families staying put rather than moving
“Lilydaleisthenextbigthing,
thebridesmaidtoRingwoodin
myopinion.”TONYRINDFLEISCH
THE STATES n Victoria Victoria n THE STATES