VIC Most expensive suburbs by per sqm land

I would like to put together a very simple rough list of the most expensive suburbs per land sqm into tiers for my own education and for other people I know who are interested. The price usually reflects everything from location, amenities, school zones, crime rates, public transport accessibility, etc.

I find it very interesting that whilst most property investors internationally focus on this price per sqm or sqft, which reflects the true value of the property, few aussies do. It's all about median price which is misleading due to bigger blocks in one suburb vs another. Obviously within each suburb there can be quite a large difference in price for the same sized land depending on which pocket, but we are taking averages here.

I would love for some comments/opinions/guidance in this inexact science. Also any additions are welcome as I am sure I have left out some suburbs. I remember the REIV posted an article about this in 2017 but I can't find the full stat breakdown on their website. If anyone could post a link that would be great. There has obviously been some downturn in the last year or so but it is roughly still accurate.

I've started this off with some guidance from the below sources and also my own experience looking at vacant land or land with basically uninhabitable houses. I have grouped them into tiers to more easily process the info:

Tier 1 (10k+/sqm): Melbourne CBD, Nth/East/West/South Melb, Albert Park, Middle Park, Fitzroy, Carlton/Nth,
Tier 2 (7.5k-10k/sqm): Toorak, Port Melb, Richmond, Abbotsford, St Kilda/East/West, Sth Yarra, Cremorne
Tier 3 (5k-7.5k/sqm): Clifton Hill, Deepdene, Burnley, Prahran, St Kilda, Elwood, Armadale, Malvern, Hawthorn/East, Kensington
Tier 4 (2.5k-5k/sqm): Brighton/East, Elsternwick, Black Rock, Hampton/East, Surrey Hills, Ormond, Ashburton, McKinnon, Camberwell, Canterbury, Balwyn/Nth, Kew/East, Caulfield/Nth,

Keep in mind that the median per sqm in Melb is around $800, so if you own in any of these above suburbs you are doing very well.

Sources

Why price per square metre is crucial data for property investors
https://www.abc.net.au/news/2017-08...expensive-suburb-by-square-metre-reiv/8793324
The price of vacant land in Melbourne has jumped by a staggering 40% in a year
Homeowners sitting on inner-city goldmines
Melbourne's most expensive suburbs per square metre
Most expensive suburbs in Melbourne by…
https://reiv.com.au/policy-resources/latest-news/every-metre-counts-south-melbourne-is-our-most-ex
https://reiv.com.au/policy-resources/latest-news/bayside-suburbs-will-cost-you-more-by-the-square-m

 

How does this help with your investing?

 

It helps me find out the true value of the land itself which I would think would be a priority for property investors. Globally, international property investors use price per sqm or sqft land as the most important metric. Median prices by suburbs are quite confounded by the massive difference in lot sizes, house vs unit vs apartment split, and capital improvements. For example, Toorak has a median price double the nearest competitor due to grand houses on big land, but it doesn't even make the top 10 when it comes to price per sqm.

The good thing about price per sqm is that it usually scales as well. From a tiny parcel of land good enough for a shed or car park to a massive lot of land that a developer would want to use to subdivide or build apartments on.

So you would imagine that the priciest per sqm suburbs, not so much the ones with the highest median price, would be the most affected in a downturn and they have been, with the inner city ones dropping 15-20%.

 

I target 500 to 600 per sq mt and not doing bad.

Apparently, in this price range, again seeing a lot of deals coming in. but 50 to 60 K's out.

Regards

 

Yeah exactly, usually lower price per sqm is more resilient in a downturn.

 

Lower price like new outer suburbs?

 

How would finding out the price per sqm of all suburbs help you find the true value of it?

 

i understand you’d want to work out the land component of what you’re paying for but not sure this will negate you needing to do a comp. I’m not sure this stacks up for assessment of value. E.g a splittable block would be worth more per sqm than a non-splittable block in the same location. A block on a main road would be worth less... etc