PLENTY has changed for the Brunswick East neighbourhood. The suburb in Melbourne’s inner North has transformed into a gentrified area featuring some of the hippest and trendiest dining, entertainment and retail outlets in the city namely along the Fitzroy and Lygon Streets.
At its most basic, Brunswick East’s allure lies in its close proximity to Melbourne CBD. Australians, in general, prefer living out of the city – a segregation that draws a clear line between work and play, both geographically and psychologically. Conversely, Asian investors prefer to be at the heart of the action, but are compelled to invest in dwellings outside the city to accommodate the local rental market comprising mainly young Australians.
One can imagine how being only 3km – 4km from the city centre, with fantastic public transport accessibility, makes living in the Brunswick East locality extremely attractive.
Additionally, housing is bigger and comparatively more affordable to neighbouring North Fitzroy and Carlton.
Today, Brunswick East is known to be the most difficult suburb in Melbourne to buy a house, forcing local and international buyers and renters alike to look to apartments instead. Recent CoreLogic RP Data statistics show that median house prices have increased by 26.6% in the last 12 months as a result. In the year ending Nov 30, only 2.1% of houses in Brunswick East had been listed for sale – well below the Melbourne average of 5.3%.
To illustrate, a house built in 1910 sold for an incredible $3.4 million at a recent auction. The house, which began at a starting bid of $1.5 million and rose by increments of $100, 000 was sold to an international investor who bid via mobile phone!
Brunswick East is followed by Carlton, Fairfield, Carlton North and Fitzroy North as some the most difficult suburbs to buy into.
In a neighbourhood like Brunswick East, there is high potential for capital growth (5.06%) given the amenities in the locality.
But, the increase in property prices in Brunswick East has an undeniable knock-on effect on rental yields. After all, rental that is too high forces potential tenants to look slightly further afield for something better. Yes, it is a constant juggle.
However, as with the law of physics, so it is with the property cycle: what goes up will come down. Prices can only go so high before the market rights itself.
What will remain constant is the demand for rental housing. Here are 3 reasons why:
- A 2.1% vacancy rate
- 20% residents are students (Uni of Melbourne and RMIT are about 10 minutes away)
- Good public transportation system with direct access to CBD
- The incredible growth rate of Melbourne’s population – more people, more need for housing (100K migrants per year; Victoria’s growth rate of 1.8% surpasses W. Australia (1.6%) and NSW & Queensland (1.4%)
- Time Capsule House in East Brunswick to go Under the Hammer
- Brunswick East the Most Difficult Suburb to Buy a House
- The Melbourne Market Will Continue to Perform for Investors if you Know where to Buy
- Melbourne’s Little Italy A Guide to Lygon Street
- Buying into A Tightly Held Suburb of Melbourne
CSI Properties (Cornerstone International) proudly markets international investment property with high yields at low risk. Our portfolio comprises residential and purpose-built student property in cities across the United Kingdom (London, Luton, Manchester, Liverpool, Newcastle, York, Glasgow, Scotland; Sheffield, etc); Australia (Melbourne, Perth, Brisbane) and Thailand (Bangkok). Our projects are concentrated in high-growth areas with great educational, infrastructural and job growth potentials. We aspire to make a difference in the lives of our clients by helping them achieve their investment goals through strong market research backed by third party experts and due diligence.
Disclaimer: Cornerstone International does not provide tax & legal advice and accepts no liability. Readers are encouraged to consult a qualified tax or legal advisor for a thorough review.
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