T H E
R E P O R T
M A R O O N D A H
THE R E P O RT 2019
2 0 1 9 E D I T I O N .
Welcome Welcome to Jellis Craig’s 2019 Report, your annual insight into some of the key economic, demographic and social factors that are shaping Maroondah and the wider Melbourne market.
With limited choice for buyers who are looking to take advantage of the low interest rate environment, we’re seeing a new level of competition that is certainly bolstering the selling conditions.
The past two years have seen periods of turbulence for Melbourne residential property, with uncertainty around the federal election, the Banking Royal Commission and changes to lending criteria shaping an overall climate of apprehension when it comes to buying and selling homes.
In this year’s Report, we cast an eye over the market in your area, including analysis of recent sales and our predictions of what to expect in the short to medium term.
Post-election, however, we have begun to see positive sentiment return in Maroondah. Auction clearance rates have steadily increased, while prices have stabilised and are showing definite signs of recovery. Since the election our agents have recorded a significant increase in the number of potential buyers attending open for inspections and auctions. Many of those buyers are residents of inner-eastern suburbs who are seeking better value and an improved lifestyle for their family, which is where Maroondah continues to shine.
We also investigate the continuing strength of school zones as a driver for property growth, while industry experts from Macquarie and REA Group share their insights into the current property landscape. If the past 12 months have shown us anything, it’s that no city is immune to wider economic and market factors. But it’s also demonstrated that Melbourne is well placed to weather those challenges and has emerged with renewed confidence. We hope you enjoy our 2019 edition of The Report, and look forward to guiding you through the sale or purchase of your next home.
While clearance rates have improved, the volume of available property is down significantly on previous years.
D ANIEL BRO A D B E N T D i rec t o r & Au c t i o n e e r J el l i s Craig R i n gwo o d 1 | W e l c o me
WI L L I A M LYA L L Di r e c t o r & Au c t i o n e e r J e l l i s C r a i g Ri n gwo o d
T H E R E P O R T 2 0 1 9 E D I T I O N . M A R O O N D A H
3 Melbourne Liveability
5 The Property Economy
7 Property Market Future
9 Living in the Zone
11 Taking a Closer Look
13 Exceptional Sold Property
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Melbourne Liveability It was hard not to feel a little affronted after learning Melbourne had lost its position atop the Global Liveability Index for the first time since 2011. But while we might no longer wear the crown as the “world’s most liveable city”, when it comes to opportunity, stability and overall quality of life, Melbourne is still very much number one in our eyes.
As a global brand, this city has never been stronger. Unemployment is low, it’s increasingly viewed internationally as a key gateway city and, most importantly, from a property perspective Melbourne is again on an upward curve. The numbers tell the story: more than 150,000 people move here every year. And it’s that population density and subsequent demand that continues to underpin the strength of the property market, and will see Melbourne overtake Sydney as Australia’s most populous city within a decade. In the three years to March, Melbourne welcomed 460,000 new residents, while Sydney added 300,000 over the same period. With Melbourne residents now numbering above five million, population density will continue to be a significant factor in both the short and long-term future of the city. While Melbourne might have lost its liveability crown, having been overtaken by the Austrian capital of Vienna, it’s important to note that our overall liveability rating actually improved on the previous year. 3 | M e l bo u r n e Li v e a b i l i ty
Based on the criteria used in the Economic Intelligence Unit’s annual rankings, Melbourne is now rated as more liveable than at any time in its history, and Vienna had to achieve a record score in order to topple it. Melbourne still achieved a perfect score of 100 in three of the five categories on which each city is assessed: ‘education’, ‘infrastructure’ and ‘healthcare’. Of the remaining two categories, our score of 98.6 for ‘culture and environment’ sat slightly higher than Vienna, while our 95 for ‘stability’ is among the top ratings of all nations. Melbourne, like Vienna, has a rich culture of arts and architecture, an abundance of parks, good public transport and an overall sense of safety. There’s no question that both cities offer an exceptional standard of living, yet Melbourne does so without the need to brace for snow in winter. Indeed, it’s very hard to see Melbourne being toppled from the top 10 anytime soon. If anything, the city will become even more ‘liveable’ as current and future infrastructure projects are completed. The removal of many of the city’s level crossings, along with the
construction of the Metro Tunnel, are huge steps forward for our transport network. Meanwhile a number of key approved road projects, including the North East Link and West Gate Tunnel, will continue to futureproof the city to ensure it keeps pace with population growth. It’s truly a case of splitting hairs when it comes to comparing the world’s ‘most liveable’ locations – they all present
wonderful opportunities for those lucky enough to call them home. But what cannot be denied is that as a global brand Melbourne is as good as it gets, and for all of those reasons – in addition to our proud status as the undisputed ‘sporting capital’ of the world – there’s nowhere else most Melburnians would rather be.
Greater Melbourne Population
Annual Change in Dwelling Value, Melbourne 2 5% 2 0% 1 5% 1 0% 5% 0% -5% -1 0% -1 5% July 09 Source: CoreLogic
July 19 Source: ABS
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The Property Economy
Rarely has Melbourne’s residential property landscape had so many different economic forces shaping it so dramatically. With interest rates falling, major changes to lending criteria, a shock federal election result and our population continuing to grow rapidly, it’s a fascinating time for the city’s property market. After almost three years without a change in interest rates, in recent months we’ve seen two rate cuts, taking Australia’s cash rate to an historic low of just 1 per cent. Furthermore, with unemployment rates and global growth unlikely to improve in the short-term, economists are anticipating further interest rate cuts in the coming year.
Macquarie’s senior economist Justin Fabo says in recent analysis that he has “penciled in two 25 basis point rate cuts in October and November this year, but the ultimate timing will depend on several factors”. RBA governor Philip Lowe has publicly acknowledged that further cuts to the cash rate may be necessary, but will be based on an “accumulation of evidence” - everything from the outcome of “trade wars” between global super powers, to Australia’s anemic unemployment data.
The question is – what does this mean for the property market? Following a sustained period of strong growth, we witnessed the market pull back throughout 2018 and the first half of 2019. Borrowers faced a confluence of headwinds as the banking regulator, APRA, put in place restrictions on credit and the Banking Royal Commission heightened scrutiny on the major banks’ lending practices.
5 | T h e P r o pe r t y E c o n o my
In Melbourne, we saw auction clearance rates bottom out in the low 40% range in November and December, as would-be home buyers sat on their hands and awaited the outcome of the federal election. Post-election, however, with proposed negative gearing tax changes off the table we’re starting to see confidence return. Home buyer sentiment has also been boosted by the RBA’s interest rate cuts and APRA’s changes to improve borrowing capacity for some households.
Weekly Clearance Rate, Melbourne
% 100 90 80 70 60 50 40 30 20 Sep 09
We’re already seeing this play out, with both buyers and vendors returning to the market with renewed confidence.
stabilised in recent months and is showing signs of returning to positive growth in Sydney and Melbourne.
Recent data from CoreLogic shows the combined capital city clearance rate edging above 70% for the first time in over two years. The number of auctions held also appears to be climbing week-on-week – a positive sign of rising vendor sentiment as we head into the crucial spring selling season.
While the Australian economy remains in a low-growth phase, both regulatory and monetary policy settings are expected to provide continued support for the property market.
Jellis Craig CEO Nick Dowling says the market has clearly turned.
Addressing questions on whether house prices will be negatively impacted by a potential pick-up in auction volumes come spring, Fabo says history shows this is rarely the case.
“At Jellis Craig we’ve now been experiencing clearance rates of around 90% throughout the winter months, which would have been almost unthinkable earlier this year,” Dowling says.
“Rising dwelling prices are likely to encourage more buyers into the market as they become more confident that they cannot benefit by waiting for prices to fall further,” he says.
CoreLogic data also shows dwelling price growth has
Fabo anticipates that an increase in demand for property will be
driven, in part, by investors returning to the market, while Dowling says there are signs that other buyer demographics are shifting. “Since the start of July there has been a noticeable lift in the number of international buyers re-entering the market. Melbourne continues to offer better investing conditions than many of the offshore markets, and those buyers are returning in greater numbers every week,” Dowling says. Fabo adds that anecdotal information suggests investors are becoming more active. “Investors typically come out of the woodwork with a short lag to housing prices, and with that in mind, dwelling price increases of up to 10% in Sydney and Melbourne by the end of 2020 wouldn’t surprise us.”
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Property Market Future N ERI DA C ON I S BEE C hi e f Ec onom i s t, REA Gr ou p
It’s a fascinating time in the life of Melbourne’s property landscape and the Australian economy, with diverging conditions in the two markets as we march towards the end of 2019. We are going into a very different spring to last year - from an economic perspective conditions are more negative than they were 12 months ago. The looming trade war between the USA and China has caused market uncertainty and as a result seen a continued slowdown in global growth. In Australia, however, our economy is still growing, albeit relatively weakly, which is why we’ve seen two recent official interest rate cuts. From a property perspective, however, things are far more positive than they were in 2018. On Realestate.com.au there has been a 25% jump in property searches in recent months, which has coincided with three major events, the first one being the Coalition’s election win, which gave people a lot more certainty around property and particularly around tax incentives, the second being a pair of interest rate cuts, and the third being APRA’s loosening of lending criteria. At this stage the banks are still being relatively cautious, so one thing that won't change is the focus on responsible lending, however people will now start to be able to borrow more than what they were able to previously.
7 | Pr o pe r t y M a r ke t Fu t u re
The jump in property searches is flowing through to increased numbers at open for inspections and is contributing to the very high clearance rates Melbourne is currently experiencing. We know there are a lot of active buyers – they’re just finding it very hard to find anything to buy because we’re still seeing very little stock on the market. The number of properties going to auction is still down significantly on the same time last year. Of course, this can make it a great time to list a property because you’ve got the market to yourself. Many potential vendors seem to be waiting for a little bit more growth to occur before they list, so we could see a jump in the number of properties on the market in the coming months. Interestingly, our Melbourne data also shows that people are favouring premium suburbs when searching for property. Premium suburbs are seeing very high views per listing, so there's a clear flight to quality that's taking place. We’re seeing some amazing auction results, and auctions are primarily in premium areas, and that’s why we’re seeing such high clearance rates.
It seems to be that people are recognising that now is the bottom of the market so it's a good time to get in, and with APRA’s changes they’re also potentially able to borrow more because interest rates are so low. Many are really keen to enter the market now before prices jump again, because as we know, the market can turn very quickly. While we’re not seeing it show up in our finance data as yet, investors are likely to become more active in the market again soon – and there’s no reason why they shouldn’t. Having weathered the past two years, property still carries a strong sense of safety for many investors. Though we may not see Melbourne’s property market experiencing 10%-plus growth across the board any time soon, under the forecast conditions we’ll begin to see a slow recovery in prices. For premium suburbs, the jump may be far quicker and far higher than expected.
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Living in the Zone When it comes to families and their property purchasing decisions, few factors resonate more deeply than the location of school zones. In previous editions of The Report, we’ve highlighted just how heavily school zone boundaries impact upon house prices, with coveted “in the zone” properties in some Melbourne suburbs selling for up to 40% more than comparable properties that sit just outside the catchment area.
With places in top government schools in exceptionally high demand, buyers are prepared to pay a significant price premium to ensure their children – or future children – will be able to secure a place. Based on current market evidence, it’s quite clear that in 2018/19 very little has changed in Maroondah, according to Jellis Craig director Daniel Broadbent. Maroondah has a significant cohort of quality private schools, including Yarra Valley Grammar, Luther College, Tintern College and Aquinas College, that continue to attract families to the region.
9 | L i vi n g i n t h e Zo n e
But according to Broadbent, government schools are increasingly gaining traction as a key lure for buyers. “The Ringwood Secondary College zone continues to be popular with buyers,” Broadbent said. “Couple that with Ringwood’s emergence as a major Melbourne growth centre, as well as its abundance of public transport and road links, and it’s not hard to see why more and more people want to call this area home.” Nearby Norwood Secondary College also has significant enrolment numbers, as does Heathmont College. Highlighting just how significant the price difference can be, the REIV report indicated the most popular primary and secondary school zones achieved median sale prices up to $412,500 higher than properties just outside the zone. Source: REIV
8 6 10
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LEGEND Public High Schools 3
Private High Schools Median house price by suburb (Greater Melbourne) $1.0m - $1.5m $1.5m - $3.0m $3m+
Source: bettereducation.com.au. (Rating based on overall academic performance across all year levels). 18
Top Private High Schools in Melbourne 2018 1. Presbyterian Ladies' College, Burwood 2. Fintona Girls' School, Balwyn 3. Haileybury College, Brighton, Keysborough, West Melbourne 4. Huntingtower School, Mount Waverley 5. Korowa Anglican Girls' School, Glen Iris 6. Camberwell Grammar School, Canterbury 7. St Leonard's College, Brighton East 8. Melbourne Grammar School, Melbourne 9. Camberwell Girls' Grammar School, Canterbury 10. Trinity Grammar School, Kew
11. St Kevin's College, Toorak 12. Scotch College, Hawthorn 13. Lauriston Girls' School, Armadale 14. Penleigh & Essendon Grammar School, Keilor East 15. Kilvington Grammar School, Ormond 16. Ruyton Girls' School, Kew 17. St Margaret's School, Berwick 18. Lighthouse Christian College, Cranbourne 19. Strathcona Baptist Girls' Grammar, Canterbury 20. Waverley Christian College, Wantirna
Top Public High Schools in Melbourne 2018 1. Mac.Robertson Girls' High School, Melbourne 2. Melbourne High School, South Yarra 3. Nossal High School, Berwick 4. Suzanne Cory High School, Werribee 5. Box Hill High School, Box Hill 6. University High School, Parkville 7. Glen Waverley Secondary College, Glen Waverley 8. Balwyn High School, Balwyn North 9. Victorian College Of The Arts Secondary School, Southbank 10. East Doncaster Secondary School, Doncaster East
11. Melbourne Girls' College, Richmond 12. McKinnon Secondary College, McKinnon 13. Vermont Secondary College, Vermont 14. Mount Waverley Secondary College, Mount Waverley 15. Canterbury Girls Secondary College, Canterbury 16. Brighton Secondary College, Brighton East 17. Auburn High School, Hawthorn 18. Northcote High School, Northcote 19. Albert Park College, Albert Park 20. Brentwood Secondary College, Glen Waverley
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Taking a Closer Look What a fascinating period we’ve experienced over the past 12 months in the Maroondah property market. It has truly been a tale of two halves. While there has been an overall slowing of the market, in line with wider trends across Melbourne, since the federal election there has been a dramatic improvement in buyer sentiment and a tangible lift in both interest and readiness to purchase. In Maroondah, our agents have witnessed and documented a significant increase in the number of potential buyers attending open for inspections and auctions, which is a strong indication for the year ahead. While our municipality is not immune to some of the headwinds that Melbourne’s residential property market has faced, there are a number of key factors that have seen it weather those challenges and begin to bounce back rapidly. Central to that rising demand is the growing interest from buyers in the city’s inner eastern suburbs. The continued migration of families from upmarket inner suburbs, who are seeking the lifestyle and value on offer in Maroondah, continues to fuel our market. Price is rarely the number one factor for these purchasers – their first priority is to find the right property that meets their family’s needs, which is why we’ve recorded a good percentage of properties sold in the $1-2 million bracket in the last financial year.
To those who call Maroondah home, the stunning level of local amenity is no secret, and yet it remains an underpinning factor in the success and growth of the local market. Upgrades to Ringwood and Heatherdale stations, along with the A-grade retail on offer at the revamped Eastland shopping centre, have made Ringwood and its surrounds a true satellite city, supported by existing services such as Maroondah Hospital and an enviable mix of excellent government schools and elite private schools. Meanwhile, the forthcoming North East Link will unquestionably add further to the accessibility that has fuelled so much of Maroondah’s growth since the tollway opened more than a decade ago. While there is growing activity at the top end of the local property market, Maroondah continues to hold appeal for buyers at more affordable price points. Ninety per cent of the more than 1600 properties sold in the municipality in the 12 months to July were in the sub-$1 million bracket. Croydon in particular has been a hotbed of buyer activity, with 534 sales in last financial year. Ringwood ranked a distant second at 335 sales. Both suburbs remain eminently affordable. This affordability also continues to drive population growth. Between 2016 and the end of 2018, Maroondah’s population swelled by 6.25%, and is anticipated to eclipse 120,000 residents this year, for the first time in its history. The remainder of 2019 and into 2020 shapes as an exciting period in the life of our local property market, with opportunities for vendors to capitalise on the renewed market confidence and increasing numbers of buyers actively searching for their next home, while property seekers will find a more buoyant market with greater choice. Source: ABS
1 1 | Ta k i n g a C l o s e r Lo ok
IN N U MBERS
Maroondah Median Property Prices
SEPARATE HOUSE SEMI-DETACHED FLAT/UNIT/APARTMENT
OWN PURCHASING RENTING
Properties Sold by Price Range MAROONDAH BAYSWATER NORTH CROYDON CROYDON HILLS CROYDON SOUTH CROYDON NORTH HEATHMONT KILSYTH SOUTH RINGWOOD RINGWOOD EAST RINGWOOD NORTH WARRANWOOD 0% UNDER $500K
$500K - $1M
S o u r c e: R E IV, F Y 2018/19
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A SELECTI ON OF M A R O O ND A H SA L E S
Exceptional Sold Property
39 Landau Drive WARRANWOOD $1,052,000
11 Panfield Avenue R INGWO O D $ 8 9 7 ,00 0
2/2 Sunbeam Avenue RI N G W O O D E $ 6 8 5 , 0 0 0
2 Winnetka Drive L I LY DAL E $ 6 5 0 , 000
28 Richards Avenue C ROY D ON $830,000
41 Pine Road MOOROOLBARK $1,076,000
14 Bowness Court C R OY DO N HI L L S $ 8 0 3 , 0 0 0
18 Arunga Drive W O N G A PARK $ 915,000
16 Parkwood Rise RIN G WOOD N $1,190,0 0 0
10 Glencoe Place L ILYD A L E $ 7 9 0 ,0 0 0
12-14 Zealandia Road East C R OY DO N N $ 1 , 1 6 0 , 0 0 0
1/1 Anthony Street C ROY DO N $ 6 4 0,000
5 Henty Court C ROY D ON $790,000
2/27 Junction Street R INGWO O D $ 9 6 2 ,5 00
12 Bronte Court C R OY DO N N $ 1 , 3 2 5 , 0 0 0
11 Appleberry Place R I N G W O O D N $1,100,000
53 Regency Rise C H IRNS I DE PARK $790 ,0 0 0
151 Botanica Drive CH IR NSID E PA R K $ 7 9 0 , 0 0 0
2 Mills Place M O O R O O L B AR K $ 6 1 5 , 0 0 0
4 Sussex Street R I N G W O O D $ 1 , 085,000
12 Autumn Grove MOOROO LBARK $675, 0 0 0
6/24-26 Jarvis Avenue CR OYD O N $ 6 8 5 ,0 00
56 Long View Road C ROY DO N S $ 1 , 2 9 0 , 0 0 0
10 Everard Road R I N G W O O D E $ 805,000
1 3 | E x c e pt i o n a l S o l d P rop e r ty
36 Croydon Hills Drive CROYDON HILLS
13 Malcolm Court CR OYD O N N $ 6 2 0 ,00 0
15 Bellbird Drive L I LY DAL E $ 1 , 4 6 1 , 0 0 0
20 Burlock Avenue RI N G W O O D N $ 700,000
25 Hedwig Drive MOORO O LBARK $620, 0 0 0
1/60 Plymouth Road CROYDON $617,000
12 Sherman Drive B AY S W AT E R N $ 7 8 7 , 0 0 0
5-8 The Briars MOOROOLBARK $1.970,000
1/3 Alexandra Road RING WOOD E $608,00 0
12 Ainslie Park Avenue CR OYD O N $ 8 5 5 ,0 0 0
13 Woodland Avenue C ROY DO N $ 1 , 2 0 0 , 0 0 0
10 Paxton Street R I N G W O O D $ 7 70,000
50 Lockhart Road RING WOOD N $785,00 0
16 Hull Road CR OYD O N $ 6 5 0 ,0 0 0
1 Norwich Close C HI R N S I DE PARK $ 7 5 0 , 0 0 0
19 Elmore Avenue C ROY DO N $ 1 , 1 93,000
3/2 Heathwood Street RING WOOD E
9 Yallambee Way CR OYD O N $ 6 9 0 ,0 0 0
13 Henry Street RINGWOOD $1,640,000
6 Columbia Avenue C ROY DO N $ 1 , 0 37,500
54 Kincumber Drive CROYDO N $815,000
1 Eden Valley Road WARRANWOOD $1,010,000
1/5 Kardinia Crescent W ARR AN W O O D $ 8 2 8 , 0 0 0
64 Lincoln Road C ROY DO N $ 6 7 0,000 The Repor t 2019 | 14
‘The Report’ has been prepared by Jellis Craig in good faith, as a general guide to the performance and outlook for particular areas of the Melbourne real estate market. The data and information provided in ‘The Report’ is provided by third parties for information purposes only and does not constitute advice or recommendations. It does not intend to predict future performance of particular suburbs, areas, properties or property types. You should consider your personal circumstances and obtain independent professional advice before making any financial or investment decisions.