Yes! Compared to Sydney, you get 11 km closer to the city centre in Melbourne and pay $70,000 less!
The Financial Review ran an interesting article on Saturday titled Only units deliver median inner glow. It’s paywalled, but I’ve made two graphs (click to enlarge) based on information it presents in a table on house and unit prices. The data was compiled by RP Data.
The Financial Review’s emphasis was on affordability however the sophisticated readers of this blog will appreciate that there’s a more interesting story here (although with a caveat – I haven’t seen RP Data’s full set of numbers as they’re subscription only).
Figure 1 shows that a buyer has to travel 23 km from the CBD in Sydney in order to obtain a house at the median price of $500,000. However in Melbourne the median house costs considerably less – $430,000 – and, more importantly, you only have to go 12 km out to find it. All this even though the population difference is only around 500,000 people – 4 million in Melbourne vs 4.5 million in Sydney.
Thus the bundle of locational services available in Melbourne for the dollar is significantly better than in our older sister up the Hume. Those services relate to the special attractions of proximity to the city centre – high level corporate and government jobs, recreational and cultural facilities, private schools, entertainment, etc.
The value of the city centre is brought home by that quintessential icon of Melbourne, the footy. The only place you can attend an AFL game within Melbourne nowadays is in the centre. And being 12 km from the CBD will usually be a better location than points further out for accessing Melbourne’s wealth of suburban jobs and for being closer to family. No wonder migrants are beating a path to Melbourne rather than Sydney. Read the rest of this entry »
The Financial Review (paywalled) reported on Saturday that the average house sold within 10 km of the CBD in Melbourne is located on a 511 m2 block, according to data collected by property information provider, RP Data.
Of course there is considerable variation in property types within that average. Houses in the inner city (0-5 km) are predominantly terraces on small lots whereas those in the inner suburbs (5-10 km) are predominantly detached houses on larger lots.
However what is especially interesting about this statistic is how it compares with the outer suburbs. The median size of lots sold in the Growth Areas is currently 513 m2, according to property consultants, Oliver Hume.
In other words, the average lot size is much the same in the two areas.
This is surprising, but a number of caveats are in order. First, some of the properties closer to the CBD would be destined for redevelopment whereas that seems unlikely in the Growth Areas. Read the rest of this entry »