Valuer predicts Melbourne's next hot spots

THE year ahead should be positive for property in Melbourne.

According to valuer WBP Property Group, the unfashionable suburbs will make big leaps in the year ahead.

At yesterday’s Melbourne Property Outlook seminar, WBP Property Group’s chief executive Greville Pabst identified Reservoir, Frankston, Dandenong, Footscray and Lorne/Surf Coast as Melbourne’s next hot spots – tipped for big price rises in 2008.

Pabst top pick is the suburb of Reservoir, located 12kms north of the CBD. According to Pabst, the suburb recorded a 6.3% growth in last quarter ending December, taking the median house price to $411,500 – below Melbourne’s median house price of $485,000.

Pabst forecasts prices will rise 40.8% over the next year and over a five year period 55.28%.

Pabst said Reservoir has good infrastructure and is well serviced by public transport. In addition, he added it is surrounded by higher priced suburbs – Preston ($510,000), Coburg($540,000), Pascoe Vale($482,500), Northcote($720,000) and Thornbury($601,000).

Pabst next choice, Frankston is 41kms south of the CBD. The median house in the area is just $303,000.

He said with the suburb will benefit greatly from EastLink freeway and a proposed 300-berth Marina as well as the expansion of major shopping centres in the area.

Pabst predicts prices will rise over 20.35% over the next year and 83.36% over the next five years.

The next suburb, Dandenong is 31kms from the CBD. The median house in the December quarter was $305,000 – 12 months ago it was $260,000.

Pabst said major investments led by private companies including Salta Properties and Deal Corporation, as well as the State Government’s $290 million spending on infrastructure will improve prices at the “traditionally unfashionable” suburb.

Pabst predicts prices will rise by 16.8% over the next year and 48.78% over the next five years.

Another out looked suburb, Footscray is also forecast to boom. In the December quarter, the median house price grew by 10.2@ to $485,000 and the suburb is 6kms from the Melbourne CBD.

Pabst said Footscray is strategically located next door to Docklands, and Delfin Lend Lease’s Edgewater Estate and Cedar Woods’ Banbury Village. In addition, he said the area offers a good array of period housing stock from Victorian era through to 1950s art deco.

“It’s not Albert Park yet, where a single-fronted house sold last weekend for $1.3 milllion in Richardson Street,” he added.

Pabst said over the next year prices will rise 39.36% and over five years, 86.53%.

Pabst said apart from Lorne, all these areas are generally unfashionable selections and they remain affordable with the promise of solid price increases.

“Lorne offers some of Victoria’s best surf beaches, coastline and views, and the area is currently undervalued when compared to prices along the Mornington peninsula,” he added.

Pabst said the median house price in Lorne was $665,002 in the December quarter and he predicts over the next 10 years, prices will rise by 198.87%.

Finally, across regional Victoria Pabst identified Mildura, Mortlake and Wonthaggi as the hot spots.

“Each of these regional areas will benefit from significant infrastructure projects. Mildura has the world’s biggest solar power station proposed that will eventually power over 45,000 homes.

“Mortlake has announced a $1.5 billion power station and Wonthaggi is the proposed site of Victoria’s first desalination plant,” he concluded.

Australian Property Journal