Comparing Growth: Melbourne's East vs West Suburbs

Someone asked me a question about Melbourne house price.

"Why are there more expensive suburbs in the East than West?"

My answer was like:

" Well, migrant would have settled in Eastern area first for residential and agricultural purposes. That early settlement in East would have attracted more infrastructure and people. Then western suburbs would have been developed as industrial area so blue collar workers would have settled in the West which is close to works."

Now, that got me another question. Would it mean that Eastern suburbs always grow better than Western suburbs? So I selected data of 4 random Eastern suburbs and 4 western suburbs as below. Let's have a look!.

Eastern suburbs

For a decade, there were lots of ups and downs in pricing but the price has gone up a lot compared to 2014, Now here are results of growth between this time 10 years ago and peak in pricing for last 10 years.

I would say, its value has increased by about 90% for 7-10 years of time.

Now, let's look at data for western suburbs.

Western suburbs

I was expecting growth rates for all 4 suburbs were just like Point Cook. Only about 65% growth over 10 years. But other 3 suburbs surprised me.

Conclusion

Let's be honest from now. if you ever lived in western suburbs, you would know which ones are 'better family suburbs' and which are so called 'bogan central'. Yes. Caroline Springs and Point Cook would be nicer family suburbs with higher owner occupier level but the growth over 10 years in Melton exceeded 100% over 8 years. Hoppers Crossing also has grown by 93% over 8 years which are better growth rate than 'popular, leafy' Eastern suburbs.

We cannot conclude which area is better for now as we have only limited data. However, we could learn a lesson - opinion without proof with data is only an opinion. It doesn't help you do better investment at all. You can go live anywhere you would like for your home to live but when it comes to 'where to invest', you need to approach in a different way. Always have a deep dive into data. Rely on numbers, not feeling or emotion.