The magic formula drawing residents back to the heart of Melbourne
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The magic formula drawing residents back to the heart of Melbourne

In a post COVID market buyers are falling in love with Melbourne’s inner circle once again

By Claire Heaney
Mon, Jan 8, 2024 11:22amGrey Clock 4 min

People fled Melbourne’s inner suburbs as the pandemic lockdowns dragged on, but two years on, the allure of city fringe life, work and play is proving irresistible.

Convenience, low maintenance environments, less commuting, sustainability, and accessibility by public transport, cycling, or walking to work as well as access to study, food, culture, parks and health services are on the wishlist for people looking to live in the inner city.

For my stories like this, order your copy of  the summer 2024 issue of Kanebridge Quarterly magazine.

Melbourne’s inner city suburbs cling to the Hoddle Grid, the 1.6km by 0.8km area laid out to form the central activity area in early 1837 and is among the most desirable locale. Suburbs include Fitzroy, South Melbourne, Carlton, Collingwood, and Abbotsford. Richmond, East Melbourne and South Yarra are bordered by extensive parkland running from the Fitzroy Gardens, through to Yarra Park incorporating the MCG and across the Yarra River to the Domain Gardens. Belle Property partner Sam Fenna, specialising in premium city apartments, says there is an uplift in people who sold up during the pandemic, wanting to return.

A low maintenance lifestyle with easy access to parks and waterways are appealing to inner city residents in Melbourne. Image: Getty

“Some of them had coastal homes or in regional Daylesford and Trentham and we did see a peak of moves during the pandemic,” Fenna says. “A lot of them had boltholes in the city worth $2 million to $3 million and they sold up and went.

“They are starting to come back, saying they miss the action and want something back in the city.

“It’s places like Flinders Lane and all those little pockets of the city.”

Earlier this year, he inked a deal on a London townhouse inspired renovation for just under $2m to a country buyer looking for a city pad with a garage.

Sam Fenna from Belle Property says buyers have missed the vibrancy of the city.

Some of the more popular inner ring suburbs include Fitzroy and Carlton to the north of the city and Richmond and Cremorne to the east. Cremorne, formerly home to Bryant and May matches and Rosella sauce factories as well as the rag trade, has now been dubbed Silicon Yarra and is home to tech giants like Tesla, Seek among others. Employees want to live nearby.

Cremorne and Richmond, known as “Struggletown,” are close to the Melbourne Cricket Ground and Rod Laver Arena, beloved by many sports loving Melburnians.

One measure of popularity is the “walkability” of a suburb, allowing residents to perform daily tasks on foot. Walk Score rates inner suburbs like Carlton as a “walkers’ paradise” followed by Fitzroy, Fitzroy North, Melbourne, St Kilda, South Yarra, East Melbourne and South Melbourne. Victoria Walks, a health charity advising governments and business  on increasing walking participation, says the cost savings of living in a “walkable” community are overlooked.

“The ability to choose walking over driving to get to places is priceless,” Victoria Walks executive director Dr Ben Rossiter says.

“It’s better for your hip pocket, for your health and the environment. 

“Walking in your neighbourhood is important for building a sense of community connection.” 

The walkability of Melbourne’s inner suburbs is attractive to a wide range of buyers. Image: Getty

But not all inner suburbs are created equal, and he suggests anyone looking to buy or rent should spend time walking around the streets to see what they offer and what businesses, services and public spaces the area provides.

Rossiter says lockdowns highlighted the importance of having green space close to home.

“Inner Melbourne is blessed with parks and waterway walks,” he says. “But consider whether you will have to negotiate busy roads to access them. Noisy traffic and long crossing times can be a major disincentive to walk somewhere regularly.”

Also keep in mind that popular suburbs don’t necessarily have thriving shopping strips.

Fitzroys Real Estate 2023 Walk the Strip says the stretch between Lennox and Church streets on Richmond’s Bridge Road is the worst performer with vacancies at 15.5 percent, up from 11.7 percent last year. 

Yet, a few blocks away Gourmet Traveller Chef of the Year Thi Le runs two successful restaurants.

Davidson Property Advocates chief executive Tonya Davidson says the inner suburbs of Melbourne are a mixed bag and demand from buyers often depends on price point.

“What we are finding is an interest in high-end apartments. There are overseas people coming back into the market,” she says.

These include buyers with Foreign Investment Review Board approval as well as expats.

Davidson says while inner ring suburbs will always be popular, people are seeing value in the north, just past hip Carlton and Fitzroy to Brunswick and Coburg.

“East Melbourne will always be desirable due to position, transport and access to sporting facilities,” Davidson says. “It is popular with the business and medico demographics.” 

It has a median house price over the past year of $3,340,000 for houses and $750,000 for units, reflecting a mix of high-end properties and legacy of smaller units. She agrees that a walk score is important for some inner-city buyers. But that’s not the case for everyone.

Belle Property’s Fenna says while there is an uptake in car sharing, many of his buyers still want access to parking.

Many of these are “lock up and leave” residents who don’t want the big garden but still want to be able to hop in their own car, he says.



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The city’s real-estate market has been hurt by high interest rates and mainland China’s economic slowdown

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Hong Kong has taken a bold step to ease a real-estate slump, scrapping a series of property taxes in an effort to turn around a market that is often seen as a proxy for the city’s beleaguered economy.

The government has removed longstanding property taxes that were imposed on nonpermanent residents, those buying a second home, or people reselling a property within two years after buying, Financial Secretary Paul Chan said in his annual budget speech on Wednesday.

The move is an attempt to revive a property market that is still one of the most expensive in the world, but that has been badly shaken by social unrest, the fallout of the government’s strict approach to containing Covid-19 and the slowdown of China’s economy . Hong Kong’s high interest rates, which track U.S. rates due to its currency peg,  have increased the pressure .

The decision to ease the tax burden could encourage more buying from people in mainland China, who have been a driving force in Hong Kong’s property market for years. Chinese tycoons, squeezed by problems at home, have  in some cases become forced sellers  of Hong Kong real estate—dealing major damage to the luxury segment.

Hong Kong’s super luxury homes  have lost more than a quarter of their value  since the middle of 2022.

The additional taxes were introduced in a series of announcements starting in 2010, when the government was focused on cooling down soaring home prices that had made Hong Kong one of the world’s least affordable property markets. They are all in the form of stamp duty, a tax imposed on property sales.

“The relevant measures are no longer necessary amidst the current economic and market conditions,” Chan said.

The tax cuts will lead to more buying and support prices in the coming months, said Eddie Kwok, senior director of valuation and advisory services at CBRE Hong Kong, a property consultant. But in the longer term, the market will remain sensitive to the level of interest rates and developers may still need to lower their prices to attract demand thanks to a stockpile of new homes, he said.

Hong Kong’s authorities had already relaxed rules last year to help revive the market, allowing home buyers to pay less upfront when buying certain properties, and cutting by half the taxes for those buying a second property and for home purchases by foreigners. By the end of 2023, the price index for private homes reached a seven-year low, according to Hong Kong’s Rating and Valuation Department.

The city’s monetary authority relaxed mortgage rules further on Wednesday, allowing potential buyers to borrow more for homes valued at around $4 million.

The shares of Hong Kong’s property developers jumped after the announcement, defying a selloff in the wider market. New World Development , Sun Hung Kai Properties and Henderson Land Development were higher in afternoon trading, clawing back some of their losses from a slide in their stock prices this year.

The city’s budget deficit will widen to about $13 billion in the coming fiscal year, which starts on April 1. That is larger than expected, Chan said. Revenues from land sales and leases, an important source of government income, will fall to about $2.5 billion, about $8.4 billion lower than the original estimate and far lower than the previous year, according to Chan.

The sweeping property measures are part of broader plans by Hong Kong’s government to prop up the city amid competition from Singapore and elsewhere. Stringent pandemic controls and anxieties about Beijing’s political crackdown led to  an exodus of local residents and foreigners  from the Asian financial centre.

But tens of thousands of Chinese nationals have arrived in the past year, the result of Hong Kong  rolling out new visa rules aimed at luring talent in 2022.

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