Covid-19 has wreaked havoc on property markets across the world, and Australia has been no exception – but it looks like there’s one hotspot that seems near-impervious to the pandemic’s impacts.
According to property expert and hotspotting.com.au managing director Terry Ryder, one capital city has withstood the worst of the crisis.
“Melbourne markets have held up better than most against the forces of Covid-19. The number of growth markets has dropped but remains at solid levels – and prices have continued to perform well,” he said.
Ryder’s Autumn 2020 survey of sales activity found that 69 of Melbourne’s suburbs were seeing rising sales demand.
Though the Melbourne market fell after the coronavirus restrictions were brought in, apartment and house prices have “come back strongly in the most recent quarter,” Ryder said.
“In the past 12 months, two-thirds of Melbourne suburbs with apartment markets recorded growth in their median unit prices – and most of those growth suburbs increased their median prices by more than 5 per cent.
“The data suggests Melbourne markets have been resilient price-wise in the Covid-19 period, despite the fall in sales activity,” he said.
Within Melbourne, Ryder named five hotspots that were particularly resilient: Mornington Peninsula, Darebin, Moreland, Monash and Whitehorse.
“The Peninsula was the strongest local government area in the Melbourne metro area for suburbs with rising demand, at a time when few suburbs across Melbourne were thriving,” Rdyer said.
The bayside areas are affordable and have the benefit of improved transport links to Melbourne’s CBD, and also enjoy lifestyle perks such as wineries, parks, beaches, galleries, cafes and restaurants.
In this area, suburbs that stand out are Blairgowrie, Hastings, McCrae, Rye, Safety Beach, Sorrento and Tootgarook.
Darebin has held up thanks to gentrification and a strong local education and training sector which has attracted well-educated and affluent residents.
La Trobe University is a significant jobs hub and a source of demand for rental accommodation, and many areas in Darebin have been earmarked by the state government for future development, which will drive population growth and therefore demand housing, Ryder said.
“These elements, combined with low vacancies, create good opportunities for investors – both in the short-term as the Melbourne market recovers from the Covid-19 period, and in the longer-term outlook.”
Meanwhile, Moreland is well-poised for “good growth” as Melbourne emerges from the lockdown, according to Ryder.
“Proximity to the CBD, good transport links and a major education/employment hub are among the core factors driving the Moreland City property market,” he said.
Buyer demand and property prices in this area didn’t succumb to the general Melbourne downturn, and apartments remain affordable with “solid rental returns” for apartment owners.
Outside Melbourne’s CBD, Monash has the largest concentration of jobs thanks to its medical precinct and high-tech industries. Unemployment in this area has remained lower than state and national averages for eight years.
Monash is currently undergoing a construction boom – $1.5 billion spent on construction every year for the last four years – where older buildings are being knocked down and replaced by larger houses or apartments.
“Strong population growth is expected to continue, bringing about much urban renewal. These factors are identified in the State planning instrument and augur well for future housing demand.”
Whitehorse has been a long-term strong-performing property market before the shutdown came along, and will bounce back strongly, according to Ryder.
“Melbourne property markets were rising in the second half of 2019 and the early part of 2020, with prices increasing. The Whitehorse local government area was a market leader, with buyer demand strong in many of its suburbs,” he said.
Population growth and construction activity will boost Whitehorse’s local economy and a proposed rail loop will improve this region’s connections to Frankston and Melbourne Airport.
“The City of Whitehorse property market remains a favourable option for home-buyers and long-term investors because of its proven capital growth history, low vacancies, strong economy and good transport links.”