Melbourne Property & World-Class Education 3

Australia is home to some of the world’s leading educational institutions, whether it is from a private or public perspective.

Melbourne, the world’s most liveable city for the past five years, has itself seen substantial growth in the value of houses in the public school zones. In Australia, a student must live in a school’s defined zone to be able to go to that school. This is what has made several suburbs such as McKinnon (zoned for the McKinnon Secondary College), Albert Park (Mac Robertson Girls High School) and Balwyn (Balwyn High School). These schools primarily cover grades 7 to 10 – students aged 12 to 16.

Steller Managing Director Nicholas Smedley says this is an ideal time for students to become accustomed to the Australian way of life and to the education system.

“Attending a public school costs only a few hundred dollars each year compared with around $26,000 for a private school education. That is why demand for housing in the right school zone is becoming a powerful lure, particularly for Asian families who are seeing great value for money.”

Top 10 Victorian Schools by overall state score

Specialising in medium density apartment living in Melbourne’s inner-ring suburbs, Melbourne based development group Steller is doing things a little differently to the rest, ensuring that owner-occupiers not only have tailored properties that combine location, dwelling size, specification quality, scale of complex and price point – but that have access to some of the country’s best education on the doorstep.

“It is incredible to see the value education now plays on the price and lengths people are willing to go to buy into an area,” says Smedley.

“For example, we have recently launched Leigh, our Bent Street development in Bentleigh, which is part of the McKinnon Secondary School zone. Because of its proximity to this sought after school, over 50% of our apartments sold off the plan in the first 24hrs.

“Perhaps not surprisingly, a large percentage of these buyers were families wanting to invest in property for their children’s future – and I’m talking about their education, not just their inheritance!”

According to a recent study conducted by Secret Agent, a Melbourne-based buyer’s advocacy group, the higher the reputation of the school, the higher the value of the property. With the price of a house in a particular school zone increasing by $19,000 with each 1% increase in VCE study score above 40.

“Whilst not a proven science, the linkage to housing values and academic results still undeniably represents Australia’s current property game when looking a property outside of the CBD,” Mr Smedley says.

Planning legislation over the past two years has also seen Melbourne’s property game change, with both the former and current Planning Ministers – Matthew Guy and Richard Wynne (respectively) – introducing restrictions to retain metropolitan Melbourne’s skyline at 9m and ensure rapid population growth is met with strict policies around keeping high-density developments controlled.

These legislations have added to Steller’s portfolio of projects heralding attention from local and offshore investors wanting to capitalise on some of Victoria’s prime school zones and lifestyle precincts.

Mr Smedley says that whilst the State Government’s legislations have been restrictive for many of the larger scale, high density developers, his company has been able to attract buyers looking for unique and conservative investments – and in some of Melbourne’s highest yielding suburbs.

“Steller’s focus has always been on creating homes for people who don’t want the sheer scale of the family home, but who want to live in comfortable, safe and secure developments that retain a sense of space,” says Mr Smedley.

“What our 30 plus developments across Victoria have in common is that the average two bedroom apartment is not smaller than 70 square metres, with “home quality finishes” ensuring our trademark style is upheld whenever someone buys into a Steller development.”

This formula has seen Steller grow rapidly since being established in 2006, delivering a pipeline of projects in excess of $500 million, with more than $200 million currently under construction. And, with more than $800 million in future projects, Managing Director Nicholas Smedley says the appetite for this style of development has never been better.

“Over the past 9 years we have seen a tremendous shift in the buyer Steller is attracting. In the early stages, our developments were very attractive to Australian families looking to downsize from the family home – wind the clock forward and we’re seeing over 15% of our market made up by Asian investors interested in putting down roots for future generations,” Mr Smedley says.

“With the proximity of some of Victoria’s most sought after high schools on the doorstep of many of our developments, such as McKinnon and Bentleigh, it perhaps comes as little surprise that we’ve seen the shift in our clientele.”

One of Steller’s newest projects within this zone is 24-26 Mavho, Bentleigh – a project within the city of Glen Eira and an area of focus for Steller because of the Council’s early adoption of the new residential growth zones for suburban Melbourne. Again adhering to the Steller principals of medium density living in an optimum location, the Project proposal is for a development of 28 residential apartments with an average size of 74 m2 for two bedroom apartments and 97 m2 for three bedroom apartments. This Project will comprise 19 two bedroom and 9 three bedroom apartments starting from $495,000.

A mere 5km south of their 24-26 Mavho in Bentleigh is Highett – the location of another of Steller’s Projects in the 2015 pipeline.

24 - 26 Mavho, Bentleigh

Located 16 km south-east of Melbourne’s central business district with close proximity to Southland shopping centre and other key amenities, 477-479 Highett Road,

Highett is a project in Steller’s pipeline with residents able to move in Summer 2016/17. The development comprises 40 premium oversize apartments in the heart of Highett Village.

New development fund opens doors to sophisticated investors

As well as capturing the owner-occupier market, Steller Pty Ltd announced a partnership in July with Australian Stock Exchange listed company, APN Property Group Limited (APN), establishing the APN Steller Development Fund.

Forming this partnership to expand its investment footprint across Melbourne the APN Steller Development Fund was created to undertake six inner Melbourne medium density apartment developments on behalf of sophisticated investors.

Approximately 223 apartments will be developed across defined development zones in St Kilda, Armadale, McKinnon, Highett & Cheltenham, catering primarily to owner occupiers looking to downsize in these inner Melbourne suburbs.

The Fund provides investors the opportunity to participate in selected property developments with attractive target returns of 20% P.A., capitalising on both APN and Steller’s experience.

Tim Slattery, Executive Director of APN commented: “This new development fund provides investors with an opportunity to participate in carefully selected inner Melbourne medium density residential developments with attractive forecast returns, supported by strict measures designed to mitigate capital risk over a defined investment timeframe.”

“The Fund will limit capital at risk to the development sites until sufficient sales of apartments have been secured before starting construction,” Mr Slattery added.

With the APN Steller Development Fund raising up to $20 million of equity for stage one, with APN and its related parties investing approximately $2 million, sophisticated investors will have the opportunity to capitalise on property with compelling credentials. Stage one of the fund has successfully closed. Enquires can be made through Steller to secure placement in stage two of the APN Steller Development Fund.

For further information, visit: www.steller.com.au