Melbourne suburbs where house prices have plunged as much as $480,000 have been tipped to look like bargains in five years, making them prime targets for buyers now.
The median house prices in St Kilda, Clayton and Mordialloc have already fallen between $162,750 and $479,500 over the past year, according to CoreLogic records — and they could slide further.
But despite this, they head research and advisory group Suburbanite’s list of suburbs with bright long-term futures.
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The firm said the trio was capable of shrugging off six-figure price hits, while family-friendly Newport, Dingley Village, Maribyrnong and Kingsbury should also be on buyers’ radars despite house price falls or flat growth over the past year.
Each has the fundamentals — transport connections, detached houses and the right land sizes for their areas — to not only recover, but thrive by 2025.
Suburbanite director Anna Porter said a five-year timeline would suit many Melbourne families who shouldn’t be looking to get rich quick right now.
But they would need to buy within the next year or two to get a bargain that would put them ahead in the long run.
“These are suburbs I would just plain avoid if you are looking for a short-term gain,” Ms Porter said.
“It’s a short-term hit for long-term gain.”
Wilson Agents’ managing director Graeme Wilson said patches of St Kilda had been hit harder than others.
He said buyers were unlikely to get a 30 per cent discount. But “while there’s a correction in place, they can use that as leverage” to get the best price possible from those home sellers willing to meet the market.
“People should be buying now,” Mr Wilson said.
“It’s usually while everyone is saying negative things that the trend is reversing.”
Newport’s closeness to Melbourne’s CBD and transport connections had prompted early signs of a recovery late last year, according to Greg Hocking Elly Partners’ Leigh Melbourne.
“And there are a lot of young families in the area because of the local primary schools, which are very well regarded,” Mr Melbourne said.
Toorak also makes the list after a whopping $1.55 million wipe-out slashed its median house price to $3.35 million late last year. But the elite suburb’s cost put it beyond the reach of most.
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DOWN BUT NOT OUT
St Kilda — median house price down $479,500 (-34.2%)
Toorak — down $1.55 million (-31.6%)
Clayton — down $317,604 (-23.1%)
Mordialloc — down $162,750 (-15.2%)
Newport — down $72,500 (-6.6%)
Dingley Village — down $51,750 (-5.8%)
Maribyrnong — down $52,000 (-5.1%)
Kingsbury — up $1250 (0.2%)
Source: Suburbanite, CoreLogic