City Shift as Provincial Victorians Buy Melbourne “Holiday House”

Developers including Australand and ING have reported strong interest from provincial Victorian customers for inner city apartments, which they only plan to use on a part-time basis.

Lend Lease Victoria Harbour project director Maurice Coccoccia recently said that 24% of buyers at one of its Docklands developments, the Mosaic, were from the coast or country. One in ten apartments sold at the Dock 5 tower, which opened this month, were also from non metropolitan Victorians. Across the river in Southbank, Australand says 18% of sales at its Freshwater Palce project were from outside of metropolitan Melbourne.

“There’s always been a market for provincial Victorians to own an apartment in town,” said Bernard Salt, KPMG partner and author of The Big Shift, which talks about the swings, shuffles and settlement of the Australian continent.

“Melbourne is the sole repository for sectors including banking, cultural, legal, medical, education and community,” said Mr Salt. “There are any number of reasons why rural Victorians need to do more than just visit, but be here for a period of time sufficient to require a base.”

Geographically, Melbourne dominates Victoria. It’s easily accessible from Victoria’s largest provincial townships including Geelong, Ballarat, Bendigo, Shepparton and the LaTrobe Valley.

Recent improvements to the road and rail network, including major upgrades to the Southern Cross train and bus terminal, is contributing to a change in perception by provincial Victorians about Melbourne, says Mr Salt.

Mr Salt, who grew up in provincial Victoria and recounts spending hours at a soul-less Flinders Street station waiting for a train home, said the new Southern Cross station is building a positive connection with rural Victoria.

“The Southern Cross station makeover gives provincial Victorians a different introduction to Melbourne,” said Mr Salt. “I think we’re going to see an entire generation of rural Victorians in ten years who have had a positive experience in Melbourne while they’ve been waiting for a train to leave.”

The most common type of city change is the empty nester, who is fit, healthy, retired or close.

The main reasons cited for buying in Melbourne include being closer to family and friends; to attend an event such as the theatre or a concert, and of course for the football, shopping and eating.

Many buy apartments to use them as weekenders, while some, like Ian Downs, are looking to make a more permanent move.

“It’s going to be difficult not having the run of five acres,” said Mr Downs. “Having two years for the apartment to be finished will give me time to mentally adjust to the change.”

Ian is selling his property outside of Warrandyte, and moving to a terrace house – with backyard – in Docklands. He admits he never saw himself as a city slicker, but says he was converted when he saw that city living did not necessarily mean living in a concrete jungle.

“When I saw the parklands and bike tracks and realised how close it was to Telstra Dome and transport, I was convinced,” said Mr Downs. “Plus it’s closer to my five grandchildren, who can use it as a base to stay when in the city.”

Having a greater involvement in the lives of family, is one reason Noel and Valerie Elliott bought an apartment in the Victoria Harbour in Docklands. Their permanent home is in Bairnsdale, near the 90 Mile Beach, in eastern Victoria.

“Our sons live in Elwood, Northcote and St Kilda, so we got a place which was a tram ride from each of them,” said Mr Elliott. “We initially bought a one bedroom but changed out minds to a two bedroom, so that we could have the grandchildren over.”

Mrs Elliott adds that the city pad will come in handy for the Melbourne-based kids and grandkids, particularly on nights they want to stay after the football. “We also have friends from the outer suburbs that can stay with us after dinner, or an event in the city.”

“The people who buy into city apartments do so for convenience and access to key institutions like retail, shopping, banking and finance,” said Mr Salt. “I think the vibrancy associated with inner city living is a bonus for these buyers, but it is not the sole factor.”

Convenience was what won the Elliotts, with the train from Bairnsdale pulling in at Southern Cross Station. It is also one of the most common reasons Melbourne’s middle suburbs are not as desirable as the CBD-surrounding ones.

“We were spending most of our lives in the car,” said Mr Elliott, who said they tried to have a Melbourne base in Patterson Lakes but that it was too far away.

“Traveling by either car or train takes about 3.5 hours,” says Noel who makes the trip about once every three weeks. “With current petrol prices the way they are, the train works out to be cheaper”.

 

Case Study: Terry & Joanne Howard

Melbourne has always seemed like a second home for Terry and Joanne Howard, who recently bought an apartment at Freshwater Place in Southbank.

Like many parents of children who study in the city, the couple found that they spent a lot of time in Melbourne – and still do, with her three 20-something children now living here.

Joanne and Terry live in Albury, about three hours north east of Melbourne. They commute to Melbourne every two to three weeks for any number of reasons including catching up with children, going out to dinner or to a show, or to do some shopping.

They chose a Southbank apartment, near Flinders Street station and Southgate. Also on their inspection list were inner city areas including Carlton, and St Kilda Road.

“We actually looked at lots of different areas,” said Joanne. “We were won over with the facilities of this building however, which also offered us city views”.

Inner city apartment complexes typically include a gymnasium, swimming pool, sauna, spa and steam room for apartment owners and tenants to use.

Freshwater Place is unique in that it also offers its residents membership to the Skyline Club on level 40 of the building. It offers residents an exclusive bar and lounge, media facilities and a massage room.

Case Study: Robert Evans

Robert Evans is a Ballarat-based accountant, who plans to use his new apartment in Docklands as a weekender.

He is one of a growing number of professionals who live and work in provincial towns, but spend their weekends in Melbourne.

“I can picture myself leaving the office at four or five on a Friday afternoon, being in my Melbourne apartment in an hour, and walking to a nearby restaurant for dinner,” said Robert.

Robert admits it was only after inspecting terrace houses in the suburbs that he realised how convenient a city pad would be. “They were expensive, mostly in need of renovation, with huge maintenance and no off-street parking.”

He ended up buying a two bedroom apartment in the Lend Lease’s Mosaic development, in Docklands.

“For me, this apartment had a huge advantage in that it wasn’t in the city, but on the city’s edge,” said Robert. Like many provincial Victorians who buy in town, he also plans to travel to town by train which from Ballarat will take just over an hour.

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Marc Pallisco

A freelance property analyst and journalist, Marc is a co-founder of realestatesource.com.au.

Marc Pallisco

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