The Small Melbourne Houses Surging in Value

Small period homes are surging in value across inner Melbourne.

Small period homes are surging in value across inner Melbourne, according to new data compiled by the Real Estate Institute of Victoria.

Single-fronted and smaller double-fronted Victorian and Edwardian houses within 10 kilometres of the CBD have been selling for as much as $10,000 per square metre in the past three months as buyers focus on small, character homes in good locations.

The most sought after area for these smaller houses has been in Melbourne’s north and inner west, where many buyers look for value.

The most sought after area for these smaller houses has been in Melbourne's north and inner west.

The most sought after area for these smaller houses has been in Melbourne’s north and inner west. 

Northcote has seen a $200,000 rise in the past three months (from June 1 to August 20) compared to the same period last year, according to the REIV.

This growth, of close to 30 per cent, is just ahead of Footscray which has seen a $253,000 increase (25 per cent ahead of the same period last year).

REIV chief executive Geoff White said that with development growth in the inner suburbs, there were fewer character homes than there were in the past.

35 Campbell Street in Coburg sold for $1,331,000, about $150,000 above reserve.

35 Campbell Street in Coburg sold for $1,331,000, about $150,000 above reserve. 

“Yet they seem to be just as popular as ever before – with the demand, and lower supply, leading to prices close to or above $1 million for these smaller homes,” he said.

Last weekend, Jellis Craig notched up three auction sales above $1.3 million for small period homes in Brunswick and Coburg – a price level that would have been out of reach 18 months ago.

The agency sold a double-fronted home on 430 square metres at 35 Campbell Street, Coburg, for $1,331,000, about $150,000 above reserve. It drew offers from four bidders.

Baby boomers have been competing robustly with investors and young professionals for quality cottages.

Baby boomers have been competing robustly with investors and young professionals for quality cottages. 

Five bidders duked it out for a two-bedroom cottage at 30 Mountfield Street, Brunswick. It made $1,073,000 at auction, against a reserve of $950,000.

“There are amazing results occurring in Brunswick on the back of price escalation in places like Fitzroy North and Northcote,” said Jellis Craig director Craig Shearn.

“It is really rippling between areas in the single-fronted market and the double-fronted market.

“People are scaling up because money is so cheap. We are now getting $1.6 million to $1.8 million for double-fronts in Brunswick on about 350 square metres. These were houses that two years ago were worth $1.3 million or maybe $1.35 million, if the vendor was lucky.”

Several cashed-up demographic groups are targeting single-fronted and double-fronted homes. Baby boomers – seeking low-rise, easy-to-maintain period houses in lifestyle-rich locations – have been competing robustly with investors and young professionals for quality cottages.

Nelson Alexander sales director Arch Staver said there was particularly strong demand for renovated and wider-than-normal single-fronted properties in A-grade positions.

He said the inner-north and inner-city markets had seen stepped-up buying of cottages by investors since early this year.

Mr White said that the sales environment was “ripe” for this sector of the inner-Melbourne market.

“Period style-homes are particularly attractive to downsizing homebuyers, offering character living in a smaller property,” he said.

“The downsizer demographic continues to grow, as children leave home and empty nesters look for CBD fringe, smaller homes.”

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Article by – Chris Tolhurst; Infogr.am
Photo Credits: Jellis Craig