‘Well-kept secret’: The Melbourne suburb where units are up nearly 30 per cent

1 month ago 4

Unit prices in parts of Melbourne have risen by nearly 30 per cent as buyers, with help from the expanded 5 per cent deposit scheme, flock to more affordable property.

The largest price jumps over the past year occurred in Maidstone (29.5 per cent) in Melbourne’s inner north-west, the latest Domain House Price Report for the December quarter, released on Thursday, shows.

In the city’s south-east, units in Chadstone rose 29.3 per cent and Notting Hill rose 24.2 per cent.

The rises come as the median unit price in the Victorian capital reached $601,184 in the December quarter, up 3.8 per cent in three months.

In the house market, the median price hit $1.1 million in December, up 7.4 per cent in a year. Median house values in Canterbury, a well-heeled suburb in Melbourne’s east, rose most, up 22.5 per cent to $3,675,000.

It was followed by a 21.7 per cent jump in Bunyip at the eastern edge of Greater Melbourne, to $863,750, and 20.7 per cent (to $1,388,000) in Heidelberg.

Domain’s chief of research and economics, Dr Nicola Powell, said buyers were leaning into more “affordable property types” such as units, particularly in suburbs with stronger owner-occupier demand and good amenities.

“When you’re seeing over a 20 per cent increase, particularly in the unit sector … I think the expansion of the 5 per cent deposit scheme could be having an impact,” Powell said. “Victoria and Melbourne were seeing stronger participation from first home buyers anyway, and the expansion just added more fuel to that demand.”

In the case of Chadstone, Powell said the suburb’s recent popularity could also be a “snapback” after underperforming over the past five years, when there was only an increase of 8 per cent in unit values.

For houses, Powell noted rises in inner and middle-ring family areas such as Canterbury, Heidelberg, Brunswick West, Clayton and Fairfield.

In contrast, units in locations close to the CBD fell in value. Carlton, Malvern East, Melbourne and Footscray were down more than 10 per cent.

“Investors have been looking towards other markets for growth potential, and we’ve only just started to see them returning to Melbourne’s housing market,” Powell said. “That is maybe why we have these more centralised CBD locations that traditionally see more investor activity [lagging].”

Ray White Sunshine real estate agent Terry Fitzpatrick said Maidstone had “always been a well-kept secret”.

“It’s the little cousin of some of the well-known suburbs, such as Avondale Heights and Maribyrnong in the north, and Yarraville, Seddon, etc in the west,” he said.

Maidstone, a suburb in Melbourne’s inner west, has experienced the biggest rise in unit values.

Amenities have improved significantly over the last year, attracting both first home buyers and investors.

“Buyers are still seeking good value, and the Maidstone provides good entry-level value, only six to seven kilometres from the CBD,” Fitzpatrick added.

Interstate investors – “especially from Sydney” – have also flocked to the area. “I had a Sydney investors buy a unit, sight unseen, in December,” he said.

PRDnationwide chief economist Dr Diaswati Mardiasmo said the rise in Melbourne’s property values showed the market was coming back.

She attributed a period of slower growth in the Melbourne market to lockdowns, an increase in land tax on secondary properties and a relatively high amount of unit supply delivered.

The combination of lockdowns, interest rate rises from rock-bottom levels and “knowing that there’s always going to be unit stock has meant the recovery process for prices in Melbourne units has been really, really slow”, Mardiasmo added.

However, a subsequent three interest rate cuts in 2025 and the introduction of the extended 5 per cent deposit scheme had made it easier for people to borrow money, she said.

“Many Melbourne apartments still fit under the [$950,000] threshold, even after the increase in value,” Mardiasmo said. “There are a lot of opportunities for first home buyers to actually get in.”

Tennille Burnup is looking to buy a unit.

Tennille Burnup, an interior designer with her own studio, Tennille Joy Interiors, is in the market for a two or three-bedroom unit around Brighton.

The mother of one, who is renting an apartment with her son, said she moved to Brighton a couple of years ago from North Melbourne to get a feel for the area.

“I’m looking at the established Bayside areas. It’s exciting. You can go and check out the sunset after dinner – it’s just magical,” she said.

Armed with a mortgage broker, a buyer’s agent and her accountant, Burnup is taking her time finding the perfect apartment.

“I am looking for an apartment with good bones so that I can put my own touches to it … preferably ground floor because I like to grow my own herbs,” she said. “Size matters less than proportion, light and how the space feels day-to-day.”