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Property academic Peter Koulizos says househunters looking for bang-for-their-buck should look at houses in Coburg, Footscray, Frankston, Seaford, Seddon and Yarraville.
He says Brunswick and Flemington also offer good value on apartments and units.
Most are close to the city centre and those that aren’t are close to the beach. Most have period houses and all have potential for what Koulizos describes as gentrification.
“You can change the buildings and you can change the people. You can never change how close a pace is to the city or the sea,” he says.
Koulizos describes a bargain suburb as one that is relatively cheap now but has the potential for capital growth in the future.
He says the major drivers of capital growth are:
- PROXIMITY to the city or sea.
- NEAR a prime suburb.
- GENTRIFICATION of the area.
- REDEEMING features such a train station, shopping centre, zone of a sought-after public high school.
- SUBURBS with period homes.
Koulizos says while suburbs like Yarraville, Seddon, Footscray and Coburg fit the bill, not every house in every street will do well.
“You need to choose your location within your suburb,” he says. “Look in macro terms and also micro terms.”
Koulizos suggests looking for a period, older-style home in the right street.
“By right street I mean wide, tree-lined with houses set back. You need to be surrounded by other appealing houses.”
Koulizos says Frankston and Seaford get a nod thanks to their proximity to the water.
“I quite like Frankston,” he says. “It has got the beach and it has got some sense that it is going to do well. Eastlink was a bonus. It brings that part of Melbourne closer to the CBD.”
Koulizos says bargain hunters should also look at older units in Flemington, which can be bought for $350,000.
“I have seen these places. The units that I have been to in Flemington have views across the city and are walking distance to the train station,” he says.
“Because they are older properties, most of the $350,000 is going to the land component and you are never going to lose on the land.”
Koulizos – author of Top Australian Suburbs: A Guide for Investors and Homebuyers – cites suburbs including Richmond and St Kilda among those that were run down and then went through the gentrification process.
He suggests driving around suburbs to see whether people are spending money on their houses.
And he says it is also important to examine levels of government spending in the area.
“Government spending includes beautifying streets, parks/reserves, upgrading roads and installing infrastructure like train stations and hospitals,” he says.
“Private spending includes construction of new homes and renovations or extensions of existing shopping centres.”
Happy House Hunting!
Written by Peter Koulizos, university lecturer, author and buyers advocate.