See what I did there? Right now I’m guessing you’re thinking, ‘What does a famous Charles Dickens novel have to do with a property research blog?’ Allow me to explain. ‘It was the best of times, it was the worst of times,’ Charles Dickens writes in the opening lines of A Tale of Two Cities as he paints a picture of life in England and France. An anecdote that applies, generally speaking, to the recent performance of Melbourne’s property market.
As I’ve often said on this blog and as you would’ve heard if you’ve attended an educational event, if I had only one word to describe Melbourne’s property market it’d be segmented. A tale of two, if not multiple, cities indeed. Contrary to Sydney’s experience this cycle, the Melbourne property market has been far less uniform in its performance, both in location and product type.
It won’t surprise you to hear that Melbourne’s property market has outperformed all markets except Sydney’s during this most recent upswing. What makes this cycle unique, however, is the heterogeneity of performance between regions and product types. Naturally, this presents an opportunity in sub markets that’ve performed below the capital city average. Where are these markets, I hear you ask? This cycle has been dominated by an outperformance of the east and south east of the city. These regions have experienced double digit growth annually since 2012, resulting in the most significant price disparity between east and north and east and west over the last decade.
The table below shows the capital growth rate for a sample of suburbs in the eastern, northern and western subregions between 2012 and 2015:
|2012 -2015 growth rate||53%||32%||26%|
Clearly, the northern and western subregions offer stronger value propositions than the east given the outperformance of the latter over the last 36 months. Indeed, our research indicates it remains the best of times to be investing in Melbourne, particularly (of course not exclusively) in the western and northern subregions.