Being listed as the “Top 10 Danger Zone Suburbs in Australian Property” by a national property buying service is not a sign of imminent danger, said real estate agents working in two of the areas on the list, Box Hill and Footscray.
In a press release explaining the list released earlier this week, buyers’ co-founder Peter Wargent said there had been “a” race for space “over the past 18 months, sending house prices higher but unit prices in some high supply areas look more risky. ”
“Although demand has fallen sharply given the absence of international students and other visitors, there are still some areas with a large amount of potential new entities in the pipeline over the next few years,” Wargent said. “The danger areas are not limited to a state or city, but rather exist where there are clusters of new developments.”
Three Melbourne suburbs on the list compiled by RiskWise Property Research were Box Hill (number two on the list) with 1833 new units on the way over the next 24 months, Footscray with 1,531 units (fifth) and South Melbourne with 1,056 units ninth. At the top of the list was Schofields in New South Wales with 3,397 new units on the way.
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Chris Gotzilianis, sales manager and auctioneer for McGrath real estate agents in Yarraville, told Neos Kosmos that sales of units in Footscray were not just dependent on foreign buyers.
“Footscray is close to town and is ideal for young people who can afford to buy. Developers are conservative and there must be something there, otherwise the building will not take place.
“Development (of units) has to happen because detached houses are expensive here (in Footscray) and sell for over $ 1 million. So you are looking for apartments and townhouses that are more affordable.
“You can buy an apartment for $ 400,000, and it’s cheaper to pay off a mortgage than it is to rent,” Gotzilianis said.
He added that Footscray was a “stable” suburb that delivered good returns.
“Footscray is always good at bringing people in. It had the Greeks, the Italians and the Vietnamese, and now new societies are coming in. It always changes and there are opportunities for companies. ”
However, he said the only limitation was the increasing difficulty in getting bank loans now than when the pandemic only took hold early last year.
In 2020, the government responded with a series of measures that allowed buyers to save on stamp duty and provided incentives to first-time buyers. There are fewer incentives available to them now.
“Banks will not approve loans if people receive COVID payments alone. If you receive public payments, it means that you are largely unemployed and do not work 30 to 40 hours a week. ”
Gotzilianis added that inflation would rise in the coming years and that there was a need to protect those who would be most vulnerable when the size of the monthly repayments increased as a result.
Speaking about the boxing market in Box Hill, Chris Manolopoulos an auctioneer and sales agent for McGrath Realtors in Whitehorse and Manningham told Neos Kosmos: “I understand that a number of units and developments are within the pipeline for Box Hill, but a vacancy should not be worried – Box Hill sellers have in the past and even after lockdowns still greatly benefited from other target buyers (investors and position buyers) to a great extent. It also does not look like it will slow down anytime soon. ”
“An oversupply of units within Box Hill has always been the case – but owning a property is still an Australian and the agenda of all migrants”
“Unit owners should not panic, especially in the Box Hill area – yes, the absence of international students can affect prices and vacancies, but a place with reputable schools, public transport and facilities will always counteract this. And when the average selling price of a house is almost $ 1.6 million. In Box Hill – buyers will of course compromise and buy somewhat less, which is the reason for a 6.6% growth in units in the first eight months of this year. “
“As auction clearance rates are also at an all-time high (with no signs of slowing down), a great location or new product will always prevail.”
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