In This Week’s How’s The Market | Edition 146
Same Home, Different Postcodes = Millions Different
Why Postcode Branding Matters More Than You Think
Market Knowledge Could Save You $400,000
The Shocking Price Difference
A new Victorian home just hit the market in Windsor.
17 Hornby Street. Four bedrooms. Fully rebuilt and renovated with a price tag of $3.6 to $3.9 million.
What has been so interesting about this property is what the real estate article and agent had to say about it.
“If you placed this exact home two minutes up the road in Toorak, you’d be looking at a $6.5m price tag,” Mr Jones said.
“Here, it’s effectively half that, simply because of the postcode.”
This made me think about the difference that a postcode can make, or is it more than just the 4 numbers at the end of the address?
The 3 Reasons Postcodes Do & Don’t Matter
Branding – One factory can make shirts for Dior and for Target for roughly the same factory price, but they are sold at vastly different prices. People are more than willing to pay for status so that when someone asks, they can say they live in Toorak, Armadale or Brighton.
Demographics – similar to the above, people pay to live around people they relate to. Whether that is a Toorak buyer with $10m+ or a first home buyer who wants to live close to Chapel St. You will find that many younger buyers actually don’t want to live in Toorak for this reason and vice versa.
Local Knowledge – The above two reasons are great justifications for why postcodes matter. Though there are way more variables to suburbs that dictate price which are significantly more important than just the postcode…
For example, with that Windsor property, it’s not just the postcode. In this pocket of Windsor, the streets are far more narrow than Toorak so street parking is a lot harder, you also have to weave in and out of cars whilst driving through a lot of this area. If you have friends coming over, it’s harder for them to park as much of this pocket is permit zones.
There is a Centrelink at the end of the road which has made some of our clients in the past not want to live in this pocket.
Whilst not directly nearby, there is more social housing in this suburb than others too.
Most Buyers Don’t Know Their Market
Many buyers think too broadly about suburbs and postcodes.
Really, in order to understand a market, you need to understand how it performs on an estate and street level.
Take Glen Iris for example.
This suburb is huge and split across two council regions.
The pockets of Glen Iris in between High St & Wattlevalley Rd is vastly different to what is west of Burke Rd and vastly different again compared to what is on the other side of the Monash.
A Real $400,000 Mistake
We attended an auction for a potential client a few years ago that had just sold their home in Park Orchads and wanted to move to Glen Iris.
They just started looking and found a French Provincial.
This property was good, but not great.
The materials and quality of finishes was average at best.
They attended this auction and bid aggressively.
Their last bid was for $400,000 above the last bid.
They purchased the property, though everyone in the crowd including the agents were shocked.
The property should have sold for $4 million max, maybe $4.2m.
He paid $4.6m.
Why? He saw some other sales in Glen Iris that were high 4s and assumed Glen Iris pricing was homogenous.
Though he ended up purchasing in the cheaper side of the suburb.
If he had of signed up with us, even just for auction bidding, we would have avoided this mistake and saved him close to $400k.
What The Agents Are Saying
Sub $1 million is bonkers. Properties selling within four days. 40-50 people open with multiple offers in the first week depending on the suburb.
Feb will see the market come back to life with one office in Stonnington listing 20 properties over the next 2 weeks.
Properties above $3m are still struggling.
Properties above $20m are very slow with limited stock.
The Wow Factor!
27 Rosedale Road, Glen Iris, Vic 3146
Glen Iris Contemporary Masterpiece
Why it WOWs:
Architect-designed luxury home with designer finishes
Gourmet kitchen with marble benches & dual ovens
North-facing alfresco with heated pool & spa
Expansive living zones with secondary kitchen/butler’s pantry
Palatial main suite with dressing room & luxe ensuite
Prime Glen Iris location near parks, schools & transport
Price guide : $5,500,000 – $6,000,000
Final Thoughts
The postcode price gap is real. But it’s not mysterious.
Do your homework. Understand the pockets. Know why prices differ.
It could save you hundreds of thousands of dollars.
Because the market rewards knowledge. Not luck.
If you or someone you know would like assistance to buy this year, book in a call and we can discuss if we can help.
Thanks for reading this far!
We value feedback and if you have any suggestions on what you would like covered in the future please email me at [email protected]
Happy Buying!
Note: This is general advice and does not take into consideration your objectives, situations or needs. Please consider if this advice is suitable for you and your circumstances and speak to a professional before making any financial decisions.
