The "ripple effect" continues to push up Melbourne real estate values
The “ripple effect” is perhaps the most powerful driver of all in determining why suburbs increase in value. The phenomenon of more buoyant housing conditions in a gentrifying or affluent suburb spreading to adjoining lower-priced suburbs is certainly the key factor that has driven up house prices in Melbourne’s north over the past 25 years.
And the ripple effect continues to rule the state of play in local real estate. It’s the main reason why Nelson Alexander has just opened a new sales and property management office in Reservoir, 12 kilometres north of the CBD. The office, at 281 Broadway, Reservoir, is the company’s 17th office to open in Melbourne.
Nelson Alexander has just opened a new sales and property management office in Reservoir.
Reservoir is looming large on the horizons of owner-occupiers and investors as prospective buyers get priced out of areas such as Preston, Brunswick and Coburg.
That buyer attraction centres on Reservoir’s relative affordability to neighbouring suburbs, its access to freeways and public transport and the large sizes of standard blocks in the area.
Nelson Alexander Sales Director Arch Staver says the company has created the Reservoir office because of the push north by Melbourne buyers.
Mr Staver has been an active player in real estate sales in the inner-city and the north for almost 30 years.
He has seen the ripple effect drive up prices in many areas and actively change the perception that people have of emerging suburbs.
“I saw the push from Fitzroy to Clifton Hill, from Clifton Hill to Northcote, Northcote to Thornbury and Northcote to Preston, and now the logical spot is Reservoir,” he says.
“There are pockets of Reservoir that are highly coveted. People are looking for value for money in a buoyant market. That is the criteria: where can I get more bang for my buck? We have found that those people who are priced out of Preston are willing to go just that little bit further north.”
There are pockets of Reservoir that are highly coveted.
The ripple effect has already swept through and changed the market in many areas of Melbourne and in other cities.
But buyers and investors can exploit this trend if they stay ahead of the pack. One strategy is to give a wide berth to the best suburbs, where house prices are already sky-high, and instead look for good properties in the next-best areas. In these areas a savvy buyer is more likely to find well-priced properties and may achieve a high rate of capital growth over 10 years or even in a shorter time-frame.
Reservoir stacks up well in this context.
According to real estate.com.au, the suburb is a high demand market with its online listings currently attracting 844 visits per property.
CoreLogic data shows that the median house price in the suburb is $800,000 and the median weekly rent for a house is $370 per week.
Two-bedroom units have a median price of $490,500 and such a unit will rent for a median $345 per week.
Mr Staver says a big plus-factor is that many house blocks in Reservoir offer 600 square metres of land.
“That has a lot of appeal to young families and to property investors,” he notes. “Reservoir is also on the same public transport lines as the other northern suburbs, so it is only marginally further north in terms of travelling times and access to the city.”
The suburb is well serviced by four railway stations: Reservoir, Regent, Keon Park, and Ruthven, and various tram and bus routes.
Reservoir is well serviced by four railway stations.
Reservoir is a family orientated and ethnically diverse suburb. The Northern Ring Road, Hume Freeway, Tullamarine Freeway, Calder Freeway and Eastern Freeway are all within a short driving distance.
Added to this, Reservoir is a popular area for recreation and sports. Large open areas such as Edwardes Lake Park provide space for community gatherings, walking tracks, athletic clubs and playgrounds. The Reservoir Leisure Centre is a quality sporting facility servicing Reservoir and the northern suburbs at large. Convenient shopping is available on the Edwardes Road and Broadway shopping strips, and the La Trobe University Bundoora campus is also close by.
The suburb clearly benefits from retail hotspots in neighbouring suburbs, such as Northland Shopping Centre and the Preston Market.
Nelson Alexander’s new Reservoir office is located at 281 Broadway, Reservoir 3073. For enquiries about any of your real estate needs, please call 9469 1000.
