Big growth for single-fronted houses

Single-fronted cottages have been outstanding performers during Melbourne’s real estate recovery this year – and will continue to attract large price premiums over spring and summer.

The supply and demand argument is compelling. Because Victorian and Edwardian cottages occupy prime locations in key suburbs their fixed supply means they benefit very strongly from the scarcity factor.

Several cashed-up demographic groups are chasing single-fronted homes to fuel the ongoing trend. In the past 18 months, baby boomers – seeking low-rise, easy-to-maintain period houses in lifestyle-rich locations – have been competing robustly with investors and young professionals for quality cottages.

At Nelson Alexander, we’ve seen substantial price growth both for renovated and original-condition cottages in the inner-city as well as in areas such as Kew, Coburg and Preston.

Sales director Arch Staver says there is exceptionally strong demand for renovated and wider-than-normal single-fronted properties in A-grade positions.

On October 4, Arch auctioned an architect-renovated three-bedroom Victorian at 26 Berry Street, Clifton Hill, and achieved the highest price ever for a single-fronted house in the suburb.

A downsizing baby boomer couple outbid five other parties to pay $1,961,000 for the property. The reserve was $1.55 million.

Arch says the high quality of the renovation and the property’s sought-after location provided the right conditions for a tearaway auction and a great sale price for the vendor.

Despite the sharp increase in new apartments and townhouses coming on to the market, cottages have been punching well above their weight.

In Northcote, some two-bedroom cottages are now selling for $850,000 to $950,000, about the same price as a similar cottage in Fitzroy North.

It’s a basic economic principle that the market will pay a premium for a good that is limited and not in production. The limited availability of single-fronted Victorian and Edwardian cottages fits squarely into this category, especially given that the trend with larger homes today is toward a generic housing design and construction approach.

Arch says the long-term capital growth for single-fronted properties is very positive.

He says home owners with single-fronted houses that are free-standing and/or six metres wide are especially well-placed to profit from the stepped-up demand for this category of property.

“The traditional single-fronted house is approximately five metres wide,” he says.

“Where you have a property that is semi-detached or at the very least is six metres wide, it usually means the room sizes are bigger and the hallway is a bit bigger as well.

“The home we auctioned at 26 Berry Street was free-standing. It was on some extra land and had a frontage of almost eight metres.

“It is considerably grander than the typical single-fronted Victorian and, of course, that’s why it appealed to so many people.”

Location works as strongly as limited availability for vendors selling cottages. Many single-fronted houses were built in the best positions. Nothing changes and today’s position-focused buyers are looking for the same convenience.

Arch says when renovating a single-fronted house, the juxtaposition between the old and the new has to flow well if the property is to maximise its resale appeal.

Providing substantial storage and excellent natural light are other keys to attracting multiple buyers, he advises.

“More and more people are putting pop-tops on their single-fronted houses – they’re going up at the rear of the property and adding extra accommodation,” Arch says.

If you are considering selling a single-fronted house, please contact a Nelson Alexander office for a free appraisal and detailed local information about this hot property category.