North is the new black
There is no denying the inner south of Melbourne’s residential property market, such as Prahran, Port Melbourne, Windsor and St Kilda, has seen consistent popularity and growth over recent years. And whilst it remains true that these areas are still experiencing strong property appeal, there has more recently been a distinct shift to developing inner urban areas toward the north of the Yarra River with apartments in areas such as Brunswick East and Northcote becoming increasingly popular amongst investors.
Quite simply, north is the new black.
According to Charter Keck Cramer*:
‘Locations with more attractive attributes have greater attraction for residential apartment dwellers. For example, Melbourne’s largest apartment markets are within the central and inner-city suburbs, which enjoy multiple attractive location features.’
Whilst areas to the south of the Yarra may enjoy easy access to the coast, areas in the inner north enjoy their own attractions.
Northcote, for example, is only five kilometres to the Melbourne CBD and its village-like feel comes to life through its boutiques, cafés, bars, restaurants, eclectic retail and all the day-to-day conveniences that make a suburb feel like home.
Similarly, Brunswick East is located within close proximity to Melbourne CBD (4km), as well as a number of park and recreation spaces such as Princes Park, Royal Park and the Melbourne Zoo.
These locations also play host to some of Melbourne’s best restaurants and night spots, creating a sense of atmosphere and buzz which in turn is driving the popularity and demand of these suburbs.
With easy access to multiple public transport options, Melbourne’s inner northern suburbs are well connected, ticking all the boxes for potential renters. Northcote, alone, has five train stations within its boundaries.
A new way of life
As people flock to these northern hotspots, pushing a continued shift in demand towards city fringe lifestyle suburbs, the scope for continued development of higher density dwellings in these areas is extended.
Charter Keck Cramer reports:
‘It is anticipated that apartment living will become an increasingly preferred choice for many households in Melbourne over the long term for a range of economic, social, environmental and demographic reasons.’
As the nature of the household structure continues to change, with the fastest growing segments being singles and couples without children, it becomes clearer why apartment living is increasingly becoming a more favoured option.
As John Hopkins has said on many occasions, when a property purchaser is weighing up their prerequisites in terms of what they want out of their investment, there are some fundamentals they are often not willing to comprise on, such as location, access to amenities or price. However, the one thing investors are progressively shifting on is the size of the property, hence the shift towards apartment living.
This, along with a significant acceptance of living in apartments by all generations (perhaps in part caused by increased exposure to apartment living in international cities) tips the balance favourably toward apartments from a demand sense.
Whilst location remains a force in determining demand, and is an important factor in property investment considerations, it is also important to consider other contributing factors such as population growth and demographics.
According to Urbis, the population in Northcote is forecast to increase from 25,800 in 2015 to 32,900 in 2036, representing 28% growth in the number of residents. Forecast population growth is indicative of growing demand for dwellings as new residents require residential properties.
Similarly, the ABS reports that the population in Brunswick East in 2006 was 7,412 people. By 2011, the population was 8.484 showing a populating growth of 14% in the area during that time. And this growth is set to continue, especially in the younger rental and first home buyer market with such easy access to the city’s best universities and hospitals – on top of the enviable lifestyle opportunities.
These statistics help provide insight into future demand of apartments in these areas, as well as the varying groups who are drawn to living in these areas, thereby providing some understanding into the type of tenant you may expect.
It is important to note this article does not form an exhaustive list of considerations for would be investors and it remains prudent to seek advice before making investment decisions. The Hopkins Group currently has a number of Recommended Properties located within Melbourne’s inner north.
For more information on these properties or to discuss the content of this article further, please call 1300 726 082 and ask to speak with one of our Property Investment Advisers.
*Abbotsford Apartment Market Context and Project Assessment Summary, Charter Keck Cramer
Image: Barry - High Street, Northcote
This blog post was written on behalf of The Hopkins Group (John Hopkins Property Pty Ltd). This blog post contains general advice only, which has been prepared without taking into account the objectives, financial situation or needs of any person. You should, therefore, consider the appropriateness of the information in light of your own objectives, financial situation or needs.
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