A four-bedroom, two-bathroom home at 1/33 Marie Ave, Heidelberg Heights recently sold for $580,000
Melburnians are being urged to “think again” before snapping up a unit in certain suburbs where buying a budget residence could be a financial blunder.
Those who purchase apartments and villas in areas like Heidelberg Heights and Sunbury will typically be buying within $200,000 of what they would pay for a house — leaving little margin for the home’s values to grow.
SuburbData figures show that in Heidelberg Heights, the $653,000 typical unit price covers more than 72 per cent of the cost of the area’s $899,000 median house price.
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Similarly, Sunbury’s units are priced at $490,000, about 72 per cent of the $683,000 a house would cost buyers.
Prominent buyers advocate Cate Bakos said buyers shouldn’t settle for a unit when a house was so close to within reach.
Prominent buyers advocate Cate Bakos questioned why buyers in areas like Tarneit would purhcase a unit when a house is within reach.
“The apparent ‘deal’ buyers think they’re getting in these suburbs comes with hidden traps — recent subdivisions drive the price up for structures, not the land, posing long-term risks in being able to sell that asset later on,” Ms Bakos said.
She also warned that other areas with relatively high priced units compared to houses, such as Tarneit, could also face issues with insufficient infrastructure and long commutes to the CBD that might turn off future buyers.
“Many of these areas feel the choke without amenities,” Ms Bakos said.
If buyers wanted to be in a suburb that had fallen victim to suburban sprawl and didn’t have good planning or strong local amenities, she said it was a “no-brainer” to stretch for a house instead of a unit so the land value would underpin future growth.
“Informed decisions must underpin these investments – it’s not just about what you can buy today; it’s about where it will take you tomorrow.
“Opt for assets that assure growth and sustainability.”
Suburbs like Noble Park, Berwick, Glenroy, and Tarneit also have similar pricing challenges, with unit-to-house cost percentages at about 70 per cent.
Harcourts agent Luke McCandless said historically suburbs like Heidelberg West had shrugged off their low-rent reputations.
“Today, Heidelberg West is buzzing with new developments and it’s fantastic for the area,” Mr McCandless said.
He advised first-home buyers to ignore modern units in the area and to opt for older homes where they would not be paying a premium for a new building, higher owners corporation fees and risk owning a home that is unlikely to gain value as quickly.
Ray White Werribee’s Robert Krnjeta is calling on the state government to invest in better infrastructure for the western suburbs.
Ray White Werribee managing director Robert Krnjeta said buyers considering areas like Tarneit should be thinking long term.
“First-home buyers should approach units with caution, while yes, it may serve as a foot in the door, but buyers should always be forward thinking with their long term plans,” he said.
SuburbData analyst Jeremy Sheppard cautioned buyers to be highly selective in the types of units they targeted.
“One of the problems with units is that oversupply can be a real killer of the long-term value,” he said.
“It’s best to try to avoid units in high-rise buildings and rather focus on boutique blocks where there are only a few apartments there.
“A good sign is if there’s no lift. It means there will be less apartments jammed into the same building and the strata fees are often lower.”
In Heidelberg Heights, a unit’s median price is $653,000, compared to $899,000 for a house — putting unit costs at 72.7 per cent of houses.
Similarly, Sunbury’s units are priced at $490,000, just shy of the average house price of $683,000, at 71.7 per cent.
Melbourne top 10 best places to consider buying a house over a unit
| Suburb | Units Typical Value ($) | Houses Typical Value ($) |
| HEIDELBERG HEIGHTS | 653,000 | 899,000 |
| SUNBURY | 490,000 | 683,000 |
| NOBLE PARK | 537,000 | 766,000 |
| BERWICK | 665,000 | 949,000 |
| GLENROY | 532,000 | 761,000 |
| TARNEIT | 460,000 | 661,000 |
| MACLEOD | 649,000 | 948,000 |
| THOMASTOWN | 481,000 | 703,000 |
| TRUGANINA | 472,000 | 693,000 |
| LALOR | 472,000 | 702,000 |
Source: SuburbData
Note: median unit prices did not include three-bedroom-plus townhouses
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