Riding Highett: the Melbourne suburb finding Bayside status with property values

Surrounded by blue-ribbon Brighton and Sandringham, Highett has always been a Bayside suburb by location if not by property value.

The undesirable industrial pockets in the suburb have traditionally led upper-end buyers to skip over its borders, but the once overlooked suburb is now challenging the dominance of its leafy neighbours.

House prices have grown 34.3 per cent in five years to a median of $884,500, according to Domain Group data, as renovations transform the suburb’s older houses and redevelopment takes over its commercial strips.

Medium density apartments have brought renters in, leading to local bars and restaurants popping up to accommodate the younger demographic. In turn, younger families and professionals priced out of Sandringham and Hampton are attracted to buy in to a revitalised and trendy suburb.

Its industrial links, including large clusters of factories and warehouses, had previously kept it from having the same residential appeal as other Bayside suburbs, Domain Group chief economist Andrew Wilson said.

“But there has, of course, been a movement away from broader industrial drivers of the economy,” Dr Wilson said.

“And, inevitably, as prices rise, there is a premium placed on residential over industrial.”

Hodges Sandringham director Paul Bond said many of the commercial owners had realised the value of land they were sitting on and had sold up to developers, moving their factories out to cheaper areas such as Dandenong.

“A couple of years ago, when the council changed the planning rules to higher density near the train station, blocks around Major Street and Railway Parade that were worth $800,000 were selling for $1.2 million,” Mr Bond said.

“Beach side of the Nepean Highway is premium Highett and for a long time it has been undervalued because of the commercial and industrial side, but now the majority of that is going.”

As well as medium density, Mr Bond also said there was a trend towards “flipping” older style houses with premium renovations.

Last week, he sold a four bedroom property on Wilson Street nearly $200,000 above its reserve, after the vendors completely renovated the home.

They bought it for just shy of $750,000 about three and a half years ago and sold it for $1,765,000 — pocketing more than $1 million.

“That might be a lot of money, but if you pick that home up and put it in Sandringham, only a few hundred metres away, you’re going to be paying $2.5 million,” Mr Bond said.

“When you’ve got family homes selling for $1.7 million, you’re not going to get that stigma attached to Highett that you used to.”

Bayside city council deputy mayor Laurence Evans said any stigma Highett or its neighbours Hampton and Hampton East once had now disappeared.

“The thing about Bayside is now all of the suburbs are rising [in price], it doesn’t matter where you are,” Cr Evans said.

“All of these suburbs have really come on.”

Ray White Moorabbin principal Kieran Lynch said the reputation of the area was changing as a trendy, younger crowd moved in to the area, attracted to larger blocks and amenities like the train line and supermarket.

“Land is becoming a premium in the area,” Mr Lynch said.

He sold an original cream-brick home on about 500 square-metres for $745,000 to a young family who plan to renovate. The vendors had owned the home since the 1960s, making them a significant profit, he said.