Maribyrnong is one of Melbourne’s most densely populated suburbs and is a busy business and retail arm of the west. Despite having all amenities within its area limits and being just several kilometers from the CBD, house prices have been more volatile than just about any other suburb in the west.
The price of houses in Maribyrnong rose slightly in early 2008 before dropping the same amount in late 2008 and early 2009. Prices then soared by more than $125 000 (23%) until early 2011, before dropping again by 2012 to the 2009 low. In 2013 prices are again at the 2011 high with another 23% increase over 12 months (Figures 1).
If investors had known this trend was coming and brought a property at the two market lows and sold at the two highs, about $200,000 was up for grabs with two property purchases over a 4 year period. Isn’t it easy when we see the past trends? This rapid market change is largely to do with the economic trends in the retail and business sectors that support much of the population in Maribyrnong. This fluctuation is also influenced by a large number of new apartment releases that compete in some part with the more traditional small houses in the area.
Maribyrnong unit prices rose from 2008 to 2011 by 50% and then dropped until 2013 by half of the previous gains (Figures 1). The lack of market recover compared to houses is because of an oversupply of apartments and strongly supports the old adage that land appreciates and property depreciates!
Due to the desirable amenities in the area and the proximity to the CBD, Maribyrnong rents have increased relatively consistently from 2008 to 2013. This highlights the reason why investors purchasing for cash flow tend to stay very close to major cities.
As I have mentioned in past columns, the western Melbourne property market is still recovering and now is looking like a great time to buy. Today I saw a news article about the increased population predictions for Melbourne’s suburbs and those people will put pressure on the property market, which will in turn drive up rents and property values.
Please give me a call if you are considering a property purchase in Melbourne’s west.