Through the roof: no sign of Brunswick house prices easing
Residential prices have returned to pre-COVID levels and are likely to continue rising
Tuesday, April 20, 2021
OPPORTUNITIES for first home buyers in Brunswick are fast becoming almost non-existent with median prices approaching $1.5 million for houses and $600,000 for apartments.
A typical two bedroom apartment in Brunswick will set you back $599,500, according to quarterly property prices compiled by the Real Estate Institute of Victoria — beyond the reach of many first home buyers.
More established families looking for a three bedroom house will now typically need to be able to afford $1,205,500 million.
Median house prices in Brunswick rose by 17% and apartments increased by 6.7% in the first three months of 2021, back to the levels before the property slump caused by COVID-19 last year.
The overall median house price in Brunswick $1,310,000 million is now almost the same as it was at the start of 2020 when it reached a record of $1,325,000. House prices slumped dramatically during last year’s winter lockdown to a median of $975,000 in Brunswick.
Units were less affected by the lockdown. The median price for all unit types in Brunswick is ow $602,000 compared to $550,000 in the first quarter of 2020, an increase of 9.5%.
It was a similar story in Brunswick West and Brunswick East.
In Brunswick West, the overall median house price is now $1,420,000, which is 12.7% higher than the December quarter and represents growth of 21.4% over the past 12 months.
In a welcome respite for first home buyers, units in Brunswick West fell by 4.2% in the first quarter to an overall median of $547,000, but they have still grown by 6.2% over the past 12 months.
The tightly held market of Brunswick East has the highest median house price of the three suburbs at $1,440,000, a fall of 5.6% for the quarter but 10.8% higher than a year ago.
Units in Brunswick East rose 8.8% for the quarter to $620,000, a tiny increase over the 12 months.
In neighbouring Coburg, house prices fell 0.6% in the first quarter to a median of $1,160,000. A two bedroom unit in Coburg will set you back $600,000.
Across all of metropolitan Melbourne, median house prices rose by 6.9% from December to reach $1,148,500, while units were 4.8% higher to $672,500.
Nelson Alexander chairman Duncan McPherson said he was not surprised to see residential property across Melbourne bounce back so strongly in the final quarter of 2020 and first three months of 2021.
He said there was a lot of pent up demand and the COVID lockdowns had given buyers and sellers the opportunity to re-evaluate their lives and their housing requirements.
“Stock levels were low to start with but they’re back to normal now,” he said.
“It’s been a combination of a number of different things and then you add to that interest rates being the way they are and the economy having bounced back incredibly strongly.”
Mr McPherson said much of the business being handled by Nelson Alexander was people buying and selling within the same market.
He said key factors driving growth in the inner north were also price points and demographics.
“Public transport is a big influence. People want amenity, convenience and lifestyle.”
While interest rates remain so low, Mr McPherson said he expected the growth of prices to continue.
12 month search for a home
FIRST home buyers Jack Thompson and Laura Hughes moved into their new home, a two bedroom apartment in Brunswick West, in early March after spending more than 12 months searching the market.
Having set themselves a maximum budget of $600,000, they eventually spent $540,000 in January on the apartment in a small block near Melville Road, just shy of the suburb’s median of $550,000.
They had previously rented an apartment in Brunswick East, and both of them have lived in the Brunswick area for most of the past decade.
“This is the fourth house I’ve lived in in Brunswick over the last 10 years,” said Laura, who is on parental leave from her job as a careers counsellor at Brunswick Secondary College.
“I love it for its sense of community and community organisations, great events, good food and the parks.”
Jack said the couple had wanted to remain in Brunswick although they also looked at townhouses in Pascoe Vale, Coburg and further north. They liked Brunswick West because it was “a little calmer than Brunswick East, more family friendly and community-minded, the neighbours get to know you and say hello in the street”.
While house hunting, they attended more than two dozen open for inspections, made offers on five properties and were the under-bidders at two auctions before finally securing the apartment they now live in.
“The more we looked around, the more we realised we didn’t want to compromise our lifestyle too much and staying close to the city and Laura’s work was important to us,” said Jack, a business consultant in the not-for-profit sector.
“The building we’re in is an old ’70s brick building with 12 units on the whole site and it has a bit more space than modern apartments you find in Brunswick East with a bigger kitchen and bedrooms.
“It feels a bit more like a home than the apartments going up in the east.
“Brunswick West feels like the only really affordable suburb left in the inner north of Melbourne.”
While the couple never despaired they would not eventually succeed in their house-hunting, as first home buyers they did find it frustrating that they were often competing against older and wealthier people buying an investment property.
“We went to some inspections with 250 people going through and some people rocking up in a Mercedes. We didn’t even bother with those places because they ended up selling for $100,000 or $200,000 over the reserve.”