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The latest happenings in the Melbourne property market. For our Essays and The Secret Agent Report, see our Research page.

Category Archives For: Local Interests

A Saturated Market – Melbourne CBD

The Melbourne CBD property market seems to be saturated. While the amount of stock in most inner city suburbs has dropped this year in comparison to last year, the CBD has increased.

While stock levels through the CBD continue to increase, the amount of sales has not – leaving a spill over of property that is not sold and just sitting on the market. For example in the month of December 2012 841 properties were on the market with only 50 sales taking place – this number very similar to the number of properties sold in December 2011.

Some property in the CBD has been sitting on the market for over a year. The reason for this comes down to the amount of property located in the CBD and then the quality of that property.

The CBD is full of high density living (apartments) and very few buildings that possess top notch quality. There are some buildings of great quality, like the Melburnian, however these are few and far between.

Melbourne CBD

Photo by Nova Photography

If we compare this with the suburb of Fitzroy, where 25 properties were on the market in December 2012 and 10 sold throughout the month. Given there is a much smaller number of homes in the suburb this is to be expected, however the ratio of homes on the market that sell are far higher.

With stock levels declining in many inner city suburbs, it will be interesting to see whether stock levels in the Melbourne CBD follow trend or continue to flood as they have in previous years, with the new construction looming and many developments now settling it’s doubtful we’ll see a shortage in the near future.

Secret Agent welcomes Emma Paterson. Emma assists with acquisition, market research and the buying process.

Public & Private Housing

Melbourne’s most well known public housing sites are ear marked for some big changes – the conversion of the current high rise towers in Fitzroy & Richmond into an equal mix of public & private housing. These sites occupy some of the best locations throughout the inner city.


The government has already experimented with this tactic before at the old Carlton public housing towers – know known as ‘Viva’. The plan was likely influenced by overseas examples of mixed tenure and in line with what many consider as good practice. The mixing of the public & private housing together appears to act as some form of resolution to socio-economic divide of higher income earners and their low income peers.

Property currently located opposite, around the corner or close to public housing generally struggles to obtain real premium price. This new approach to public housing could see this soften a little with residents and potential residents having less concern with the new inhabitants of the building & the new structures blending in more aesthetically with their surrounds.

However, property prices will inevitably always suffer within the development. Unfortunately even the private allocated apartments are often seen as a cheap housing option and will likely stay that way for resale. Unfortunately there is a stigma with property located close to public housing and many of these ‘private’ apartments could share a wall with a ‘public’ apartment causing poor capital growth throughout the developments.



Sometimes capitalism and smart initiatives like public housing, intertwined with private – don’t completely align.

Secret Agent welcomes Emma Paterson. Emma assists with acquisition, market research and the buying process.

East Melbourne Wrap

East Melbourne

From Secret Agent Buyers Advocate, Jacinta Ryan.

East Melbourne properties continue to sell despite the supposed softening of the real estate market. 12 Darling St was put up for auction on the weekend with the usual large turnout of locals who always take the opportunity to catch up with the neighbours and keep an eye on property values in  the area. However two parties had their cheque books in their back pockets and were keen to spend some money in what is possibly Melbourne’s most community minded and socially active suburb on the edge of the city.

The property itself is interesting in that the home is a single level property and a reasonably new build – two unusual features for East Melbourne. Facing west onto Darling Square, it has an easterly back yard and a delightful Paul Bangay garden. Off street garage parking is a great bonus with added parking at the front of the property as there are only houses on one side of the street and centre parking also.

Bidding started after some encouragement from the auctioneer and moved quickly through the $2.5 million barrier. Stopping at $2.78 and still not on the market the last bidder was offered the option to negotiate and the sold sticker was soon across the board for an undisclosed figure.

123 Gipps St after a number of months on the market is also sporting a sold sticker and 156 George St sold for a huge price of $2.025 million. The last recorded sale in that building was about 3 years ago for $1.53 million. 156 George St is part of the old Benjamin Mansion that has been divided into 4 large residences. No slowing of the market here where quality and period meet.

Still on the market is 114 Vale St – a beautifully restored property with uninterrupted views of the city.  Whilst not in everyone’s price range, a magnificent property that leaves nothing to be done.

140 Gipps St is holding its value well in the apartment market with one originally purchased off the plan re-selling in the past few weeks.  The big brother development, 150 Clarendon St has a few for sale in there with these apartments suiting the most fastidious buyers.  A 24 hour concierge brings New York to East Melbourne.

Speaking of New York, the Tribeca development is a great entry point into East Melbourne and has its usual one or two on the market.  There are five separate developments all with their own flavour, on the one site affectionately known as the “old brewery “ and they are at an affordable level for the first home buyers needing to be close to the city and not requiring a huge space to live in.  Wellington Gardens at the eastern end of Flinders St has had some success in the past few weeks along with the much publicised One East Melbourne.

Nothing stays too long on the market in East Melbourne and there is something for all buyers at all budget points.

Housing Commission Effects on Pricing

Secret Agent were curious whether the social stigma of the housing commissions and the allure of lifestyle strips would have an effect on the prices of property. Our theory was that properties located close to the housing commissions would sell for a lower price than those further away, while properties located closer to the lifestyle centers would sell for a premium compared to those located further away. We’ve set the research on the biggest housing commission block for a given suburb. We’ve set the lifestyle centre as a point that has the closest proximity to cafes, restaurants and shops. In this sample research, Secret Agent focused on the suburb of Richmond, with the Richmond Housing Commissions and lifestyle strip of Bridge Road (Richmond Town Hall – 333 Bridge Road, Richmond was used as a central point.)

Data Used:

  • Houses sold located within a 500m radius of Richmond Housing Commissions and Lifestyle Strip (333 Bridge Road)
  • Period of data analysed was a 5 year period (1st January 2008 – 12th September 2012)
  • A total of 1116 sales were analysed, of which 176 were useable. (They fitted into either 500m of the lifestyle target or 500m of the housing commission).

With regards to the housing commissions, properties further away from the housing commission generally sold for more than those close to it. There also appears to be a link between lifestyle centers and higher property prices for the area. Secret Agent will be extending the research conducted to cover more suburbs in the near future.

Richmond – Distance from Housing Commission analysis
Price in $
0 – 100m 101 – 200m 201 – 300m 301 – 400m >400m
Within 200m of Housing Commissions
More than 200m of Housing Commissions

Housing Commission Summary

  • Property sales within 100m of the housing commission showed the lowest Median price of $715,500
  • Comparing all houses sold within 200m of the housing commission and beyond 200m of the housing commission – homes beyond 200m of housing commission sold for 10.4% more than those within the 200m circle when comparing the average sales price.
  • The highest average sales prices were recorded beyond 400m of housing commission with $935,601 being recorded.
Richmond – Distance from Lifestyle Strip analysis
Price in $
0 – 100m 101 – 200m 201 – 300m 301 – 400m 401-500m >500m
Within 200m of Lifestyle Strip
More than 200m of Lifestyle Strip

Lifestyle Strip Analysis Summary

  • Homes sold within 200m of our lifestyle centre recorded a Median value of $935,650 while homes in excess of the 200m distance recorded an average Median of $775,000. This was an incredible 20.73% difference (higher) for homes close to lifestyle centers.
  • The average sales price was also far greater for homes sold within 200m.
  • A number of high sales were recorded between the 400 – 500m circle ($4,300,000) which helped skew some data. It’s important to note that block sizes may increase the further you move out from lifestyle centre – however this wasn’t enough to trump closeness to lifestyle.

Interest Rates Fall Again

The reserve bank has lowered interest rates again with the cash rate now sitting at 3.25%.

Lower than expected inflation figures,  China running at moderate growth,  European weakness and a stagnant hosting market have all played a role.

In fact if we look at interest in Real Estate in general since 2010 – we see a decline overall.

Below’s chart shows the amount of search queries for and since 2004.  You can see the surge in searches taking place in 2009 and 2010 with a recent decline.  This has happened even as more people adopt online channels as their preferred searching methods for Real Estate.

We’ve used the two portals above as they are the most dominant Real Estate websites in Australia.

The last time we had a cash rate at 3.25% was October 2009 – just when the Real Estate market started to hit it straps with an incredible period of surging values.

The question remains – could this stimulate the housing market again?

The answer is most likely a yes.  However the effect might be – stimulation in areas that need no further stimulation such as North Fitzroy,  Collingwood,  North Melbourne etc, while helping many outer suburban areas improve only slightly – before they continue to stuggle again.

Providing ease of credit improves,  this period of “cheap money” will jump start conditions in the short term.  However the effect long term might not be as great as one would hope.

Dropping rates is like adding adrenaline to a system.   The idea is not just a relief mechanism to those that are struggling – but an incentive to kick start spending again.  The effects are likely to be good and bad.

Later this week we will be releasing the property turnover figures for 2009, 2010, 2011 and 2012 – for the first nine months of each respective year.  This should give a good feel as to the differences we’ve experienced over the past 4 years, and will shed some light on why the reserve bank has decided to cut rates.

The Story with East Melbourne

Many properties change hands in East Melbourne without ever hitting the market.  Word of mouth has always been a big seller in one of Melbourne’s most exclusive and best kept secrets. Once people are in the community they very rarely have need to move.  Whilst the suburb has always been known for its older demographic the little school bus is filling up each year as more families move into the area.  The 150 Clarendon St development viewed as Melbourne’s most expensive apartment block solved the problem for many who wanted to downsize without leaving the area.  But this came at a price with a one bedroom apartment starting at around the $1 million mark.

Back yards have always been an essential for the family home but with all the parks in the suburb, families are utilizing the facilities maintained by Melbourne City Council and investing in the big family home with larger indoor living areas.

So what is on the market in East Melbourne at the moment?  Two properties immediately spring to mind.

114 Vale Street;  one of a select few in a street off to the side of Yarra Park.  This magnificent family home has 5 bedrooms and three bathrooms, the formal lounge with intricate design and detail is on the lower level with the less formal (and more modern) Karl Fender designed extension, family room and two bedrooms on the upper level.  Built over three levels this home also has a self contained area for the teenager or guests and a rooftop garden area for the lazy summer days where one can sit and admire the views.  This home is one that makes a statement.  Standing on the upstairs balcony looking at the city lights or New Years Eve waiting for the fireworks makes this property one of the best addresses in Melbourne and all within a ten minute walk of Federation Square.  Well worth inspecting!

156 George St;  this property was originally part of the Sir Benjamin Benjamin family home, a piece of East Melbourne history.  The first Lord Mayor of Melbourne and the father of nine sons and seven daughters, he needed a large home to accommodate them all. The original large mansion has been divided into 3 substantial homes.  Perfectly positioned on the corner of George and Powlett St this magnificent property has three bedrooms, one bathroom and a car space.  This is the  ideal city pad for those who can afford it as a second home and somewhere to stay when visiting for any of the sporting or cultural events in town or just a great address for those looking at getting into the East Melbourne area.

Both of these properties will be snapped up by people looking at the top end of an already exclusive market, but properties of this quality come along once in a lifetime!

Written by Secret Agent Advocate, Jacinta Ryan

Death in Brunswick: Affordability no more thanks to first million dollar apartment sale.

The end of affordability in Brunswick continues with the sale over the weekend of its first ever million dollar apartment sale. 309/1-3 Dods Street might have gained high attention from its prominent use as a set for the television show “Offspring”, but it also captured the imagination of the buying public thanks to its nice interiors, expansive Brunswick views and natural light.

In recent times Brunswick has been the prized suburb for artists, creative types, drug addicts and all round strugglers. The emergence of the suburb and trendiness has caused many to look further out to areas such as Coburg and westwards towards Footscray.

Up and coming suburbs tend to move through price gradients that determine the residents of tomorrow. Brunswick has moved past the easily affordable price points and is now capturing the yuppie demographic that are enjoying the labour of those who came before them. Brunswick has been living off a reputation as an affordable suburb; however, sales like the above demonstrate the death of affordability in Brunswick.

There is only one way around high prices in growth areas: get down in the mud and do some work…