At this price you can get much more for your money. Although these suburbs have already seen good growth, demand is still strong and supply is limited.
We are starting to push into a price point that offers more bang for buck, as in some locations you are now starting to shop in the upper-class bracket. As per our list, this budget also brings you into a couple of the bigger income cities, such as Melbourne and Canberra, and we are also getting some land as part of this equation.
Dunlop, ACT 2615 – houses
One of the best markets around the $600,000 price tag is Dunlop houses. The suburb is about 5km north-west of Belconnen and another 15 minutes’ drive into Canberra central. It sits next to two markets in our $500,000 price range, Charnwood and Macgregor.
The LocationScore for June was 79. This is a few points lower than the markets in the cheaper price ranges. But it is still in the “excellent” range, which starts at 77.
The LocationScore for Dunlop houses has been steadily rising for the past three years. It spent most of the last year above 75 and has edged into the 80s a couple of times.
The standout metric for June was the vacancy rate. It has been better than average for over two years now and finished June at 0.26%. That level is considered extremely tight and can mean only more confidence for landlords.
The average discount from the original asking price for June was 4.37%. Our benchmark for “normal” is 5%. However, for all the markets in this report, exceptional statistics are expected and 4.27% isn’t exceptional. Nothing to worry about – just a little mediocre, that’s all.
There was one concerning metric, however. The online search interest was only 37, which is about half as good as the national average. Ideally, we’d like to see more searches being conducted per property.
Ferntree Gully, Victoria 3156 – units
Ferntree Gully is about an hour’s drive east of the Melbourne CBD. This is the only unit market in our report.
As a general rule, investors should favour housing markets for long-term growth. Units have higher risk of poor growth over the long term. It’s too easy for a developer to acquire a house or two nearby and knock them down to replace them with a big unit complex. Remember that supply is the enemy of capital growth. For the short term, however, unit markets can be lucrative, especially in small boutique complexes, so aim to buy a villa unit with good land content rather than something above ground level.
Some properties in Ferntree Gully that look like houses are listed by selling agents as units. They may share a wall with another dwelling in a strata-titled block or be an add-on to the side of a house.
The LocationScore for Ferntree Gully units at the end of June was 79. Some of the metrics contributing to this high score include:
• A vacancy rate of 0.25% – tight!
• Over 200 searches conducted online per property available.
• Percentage stock on market of 0.33%.
• Auction clearance rates above 80%.
• Properties selling in a little more than a month. However, there could be a problem for investors jumping into this market right now – it’s already had some big gains over the past few years.
Prices have risen by 40% in the past three years. Although demand is still high relative to supply, the extreme rate of growth must come to an end sooner or later.
Gladstone Park, Victoria 3043 – houses
This suburb is about 45 minutes north of the Melbourne CBD and just east of Tullamarine Airport. Houses in Gladstone Park had a LocationScore of 78 at the end of June 2018.
Prices had a big spurt in 2017, piling on around 20%. This market has not been left out of the Melbourne boom but still has some growth left, according to the indicators.
Of particular note are the fast selling times, at around 27 days. Buyers have obviously missed out on previous opportunities and now have their finance sorted and are making confident offers quickly.
The auction clearance rate was quite high at about 82% at the end of June. Clearance rates have been consistently above 75% for the past three years. Buyers would be frustrated at missing out and might be making strong offers before the auction date.