St Kilda East homes are selling for hundreds of thousands less than neighbouring bayside suburbs, with experts calling the inner-city postcode Melbourne’s biggest bargain. Picture: Nearmap
St Kilda East house prices have slumped 17.8 per cent to a $1.52m median, but experts say the inner suburb is Melbourne’s biggest bargain and set to bounce.
PropTrack figures show units are holding firm at a $580,000 median, up 0.9 per cent year-on-year, even as house values pulled back, widening the gap with neighbouring bayside postcodes.
Separate SuburbData analysis puts St Kilda East about $348,000 cheaper than nearby bayside areas, despite near-identical lifestyle and transport access.
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Prominent Bayside real estate director Gary Peer said the suburb’s median had been “heavily influenced by apartment sales” after an investor exodus, but buyer demand was pivoting.
“St Kilda East is absolutely prolific when it comes to apartments, historically it’s been a hotspot for investors,” Mr Peer said.
“But over the past few years, many investors have exited the market … the rapid rise in interest rates was a big one … land tax has also bitten hard.”
Prominent Bayside real estate director Gary Peers said St Kilda East’s house prices have been skewed by an investor sell-off, creating rare buying opportunities for families and first-home buyers.
Mr Peer said as investors sold off apartments, the buyer pool shifted and that change, combined with the sheer volume of transactions in that space, has softened price growth.
“Compared to five years ago, prices in St Kilda East haven’t climbed the way we might have expected,” he said.
In some cases they’ve stayed flat or even gone backwards and that’s rare in Melbourne.”
The new Anzac Station on St Kilda Road is set to transform connectivity for St Kilda East residents, linking them directly to the Metro Tunnel via the Route 3, 16 and 67 tram routes and cutting travel times to the CBD. Picture: Jason Edwards
However, the head of Gary Peer Real Estate said the lifestyle edge was pulling new buyers in.
“First-home buyers love it for the proximity to the CBD … you can walk to the beach without paying ‘right on the sand’ prices and the transport network is exceptional,” Mr Peer said.
Mortgage broker Jacob Thorne says cheaper borrowing costs and government incentives are fuelling fresh demand from first-home buyers in St Kilda East.
Port Finance mortgage broker Jacob Thorne said cheaper borrowing and incentives were already stirring activity, with more momentum likely as rate cuts flow through.
“We’ve definitely seen momentum building, particularly among first-home buyers,” Mr Thorne said.
“Inquiries are absolutely through the roof.
“Government incentives like stamp duty waivers, the First Home Buyer Guarantee, and LMI waivers are all fuelling confidence.”
St Kilda East combines proximity to the CBD, beach access and strong transport links, but remains far more affordable than surrounding bayside suburbs. Picture: Nearmap
Mr Thorne added that even a modest improvement in borrowing power changes outcomes on auction day.
“On a $100,000 income, buyers gain an extra $10,000 to $12,000 in capacity,” he said.
“At auction, that’s often the difference between dropping out and securing the home.
“And buyers aren’t wedded to one postcode most clients don’t lock themselves into one postcode.”
The Port Finance mortgage broker said buyers are looking at a cluster of suburbs, a dynamic that favours St Kilda East when nearby options get too pricey.
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