$1M Landfills: Alarming Entry Point for Derelict Homes in Melbourne’s Inner Northern Rim

A string of derelict houses in suburbs on the outskirts of Melbourne are listed for more than $1 million as average home prices continue to rise.

A string of dilapidated homes in suburbs such as Coburg and Preston are on the market for more than $1 million – the alarming new gateway to Melbourne’s inner northern fringe – as prices continue to rise.

Buyers priced out of increasingly gentrified areas such as Brunswick, Thornbury and Northcote are now looking further north to suburbs such as Coburg, Preston and even Reservoir.

As demand continues to rise in these areas, buyers should now be prepared to at least pay
$1 million for a house.

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Advantage Property Consulting director Frank Valentic previously told the Herald Sun that more buyers were looking for “medium-sized suburbs” as Melbourne became too expensive and “you get more bang for your buck”.

He added that suburbs like Northcote and Thornbury would be next to show regular sales of more than $1 million, which would then “flow out to Reservoir and Preston”.

This is because the latest PropTrack data shows that Preston’s median home price has increased by a whopping $170,000 (16%) over the past year to $1.23 million and $373,000 (43.5%) over the past five years. .

Coburg produced similar numbers, up $174,000 (15.9%) in 12 months and a massive $400,000 (46%) in five years.

The latter suburb has a number of offerings that reflect this change in price, even for outdated homes in dire need of renovation.

McGrath Coburg director Michael Chan has the listings for both a two-bedroom home at 48 Linsey St — last sold in 1997 for just $134,750, according to CoreLogic — and a three-bedroom home at 5 Butler Grove. The latter has an asking price of $1.35 million while the former is listed for $1 million – $1.1 million.

“$1 million seems to be the new starting point for a home to refurbish and renovate,” he said.

“We’ve seen a lot of evidence of fully renovated properties selling for over $1.5 million.”

People feel comfortable paying $1 million because they know they can fix up a property and get their money back and more,” he added.

Mr Chan said that despite their tattered condition, the two properties had attracted a lot of interest thus far – mainly from young families looking to renovate and “seeing value in the house”.

“Buyers still appreciate historic features,” he said.

“The facade may look old and dilapidated, but people are attracted to the streetscape, which is why (these houses) fetch really good prices.”

Also in Coburg, an old three-bedroom weatherboard at 13 Cole Crescent had a price tag of $1.59 million before recently selling for an undisclosed price.

Adrian Petrucelli, partner of Jellis Craig Brunswick, said $1 million was definitely the new entry point for the suburb, with “buyers in Brunswick, Northcote and Thornbury willing to pay inner-city prices”.

He said the award can be attributed to “good land components, access to schools and access to public transport.”

Similar offerings can be seen nearby in Preston, such as a three-bedroom at 131 Cramer St with a $1 million-$1.1 million price guide.

Haughton Stott’s sales manager Stefan Dzanovski said the house “will take a lot of work” but is attracting buyers because of the period’s appeal.

He stressed that block sizes, wider streets, parks and access to public transportation were all components that buyers were willing to pay more for.

And on 3 Diamond St, an old three-bedroom house also has an asking price of $1 million – $1.1 million.

Colin Abbas, Woodards Preston’s real estate advisor, said he had seen “a lot of sales in the Preston corridor exceeding $2 million.”

He also reiterated that most buyers in the area were looking to renovate older homes because they couldn’t afford to buy in the northern suburbs closer to the city.

Nearby in Reservoir, prices are also rising to reach comparable levels to Coburg and Preston, with homes like 7 Best St on the market for over $1 million. The suburb’s median price is currently at $945,000, up from $810,000 12 months ago.

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emily.holgate@news.com.au

Originally published as $1M Landfills: Alarming Entry Point for Derelict Homes in Melbourne’s Inner Northern Rim

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