With homes like 54 Park St seeking an eight-figure sale and an array of popular pubs in the area, Moonee Ponds has the depth to beat a rate hike.
Homebuyers hoping to stay ahead of the reserve bank might be wise to head to the local pub of any future suburb’s that they are eyeing.
Along with road or transport upgrades and a growing cafe scene, they’ve been earmarked as a key sign of a suburb that can endure a protracted hold at current levels — or even a shock increase.
The Reserve Bank of Australia this week decided to keep the nation’s cash rate at 4.35 per cent, the highest level since 2011.
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It marks nine months since the figure that sets the interest on Aussie home loans last changed.
But Little Real Estate sales and marketing executive general manager James Kirkland said homeowners and prospective buyers really needed to pay attention to what RBA governor Michelle Bullock said about the future of rates.
Specifically, that there would be no reductions in the “near future” and that there was “still a risk that inflation will take too long to return to target”.
While no mention of rate rises was a positive, Mr Kirkland said the stability would have less of a boost to confidence than if her language hadn’t suggested a rise wasn’t entirely off the cards.
James Kirkland is Little Real Estate sales and marketing executive general manager.
“If there’s fear that there will be another increase before the end of the year, that will make people want to hold off,” he said.
“We might also see more people going to the point of having to sell if there’s another hike this year. And there are also people who have held on as long as they could and it’s affecting their lifestyle too much to continue.”
For homebuyers, that meant they still need to be conscious rates aren’t imminently about to fall — which could lead to different outcomes in different suburbs.
Mr Kirkland has tipped five suburbs in Melbourne poised to see prices hold up better than anywhere else, even if the RBA decides to hike rates.
“These are the areas where there might be less impact, if there is any,” he said.
If your local watering hole has gone from a brain dead to a gastropub, it could be a good sign your suburb is safe from major real estate tumbles caused by interest rates.
And there are some common themes that might help buyers spot others that can beat the Reserve Bank, including looking for signs of gentrification; such as rising numbers of popular cafes, more restaurants opening — or if the local pub is regularly full of people wearing designer labels.
“You should also be looking at what infrastructure is going in: are there large shopping centres and improvements to arterial roads,” Mr Kirkland said.
For any commuter-centric works underway, the ones to watch out for are those that will reduce travel times — particularly for roads.
After that, you’ll need to understand prices and how they interact with the wider market — and if they show signs of good value.
CARLTON
With a $295,000 asking price 204/2-20 Finlay Place, Carlton, could sustain the kind of yield that would have interest rates covered if there were multiple hikes.
Mr Kirkland said Carlton’s mix of housing ranged from houses with median prices at $1.41m, through to student accommodation often below the suburb’s $392,500 typical unit cost.
The latter could return significant yields as high as 7.3 per cent — considerably better than leaving money in the bank and potentially enough to cover mortgage costs entirely.
“And there will be a whole lot more students arriving in Australia,” he said.
There are also flats and units that provide a middle ground between the two.
Mr Kirkland added that his firm had also noted a rise in inquiry rates from buyers for all home types in the suburb that was above the levels being recorded in other areas nearby, hinting demand could carry it through any negative market sentiment in the near future.
MOONEE PONDS
4A Huntly St, Moonee Ponds, gives an idea of what $1.35m-$1.45m buys in the suburb.
At just 6km from Melbourne’s CBD and with a wide range of price points, the suburb had appeal to an equally broad selection of buyer groups.
The suburb’s $1.5m median house price appeals to families, while its $510,000 median unit value suits first-home buyers and investors.
The latter would also be noting the suburb’s $510 a week median rent and the potential for a 5.6 per cent rental yield, not far below today’s cheapest home loan rates.
Mr Kirkland noted a wide array of dining spots as well as popular high-end pubs in the area also regularly enticed non-locals to connect with the suburb, building the list of aspirational owners.
And as an added bonus, it was also the home of Australia’s most-celebrated housewife — the late Dame Edna Everage.
POINT COOK
A wide array of home types can be found in Point Cook, like 57 Hemsley Promenade.
In Melbourne’s western suburbs, Mr Kirkland said the $749,500 median house price and the suburb’s relatively complete development status were a winning combination.
“And there’s a lot new construction for shops around the area, and a lot of new coffee areas popping up,” he said.
The area also delivers attractive yields by Melbourne’s standards, with a 4.7 per cent return achievable for units.
And with said units typically costing about $525,000, it could suit both first-home buyers and investors.
DEER PARK
14 Loxwood Court, Deer Park, is for sale at $830,000-$890,000.
Across most of Melbourne there is about a 35 per cent difference between the typical house price and the median unit’s value.
In Deer Park that gap is only 23 per cent.
Mr Kirkland said that was a sign that the suburb’s $645,000 median price might not stay that way for long.
“That’s showing value, and you are only 18km from the city,” he said.
Units in the suburb typically sell for $495,000, which is also well below the Melbourne wide median price of more than $600,000.
BACCHUS MARSH
48 Shea St, Bacchus Marsh, is among the suburb’s list of homes for sale below $550,000.
On the fringe of Melbourne’s new development hubs, this once regional town is seeing significant new numbers of homes being built.
But with a $640,000 median house price and a growing range of employment options in the area, it had appeal to a growing number of people wanting to live close enough to drive to the capital if they wanted to — but not be subject to the city’s traffic daily.
“So if you don’t need to go into the city or you can work from home, and you want that newer property, you might look here,” Mr Kirkland said.
He noted that while an interest rate hike was unlikely to trouble the suburb, if Victoria’s government ordered public servants back to the office in line with the NSW government’s move earlier this week — there was a prospect it could hamper growth in the suburb.
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