This transcript was generated automatically and may contain small errors.
Why is there almost no one talking about this area in Melbourne? When you first look at it, there are a few potential reasons you may think of. But beneath the surface, it gets interesting. In this episode, we're using a combination of what the data is telling us and what our team on the ground understand about this area to answer the question for you. Is the fact that no one's talking about this a good thing, a bad thing, or not a thing at all?
My name is Junge Ma, the lead research analyst at InvestorKit. Let's get into it. Now let's jump right into the area I want to talk about. The suburb is Kularu in Melbourne, postcode 3048. It is in the LGA of Hume, or if we talk about SA3, it's in the Tullamarine Broad Meadows area.
It is the neighbor of two very much talked about areas, which are Meadow Heights and Dallas. Overall, this area has been receiving a lot of attention from both homebuyers and investors. But when we look at one metric showing buyers' interest, we noticed something really interesting. So this metric is the ratio between number of interested buyers and the number of total listings. We can call it interested buyers per listing.
If we compare the interested buyers per listing of all the suburbs in this Tullamarine Broad Meadows SA3, you see that Kularu is receiving the lowest buyers' interest per listing. While some really high numbers include Meadow Heights, which is the neighboring suburb, 105 interested buyers per listing. In Dallas, it's lower, but we still have 44 interested buyers per listing. But when we look at Kularu, it's only 26. Why are people not interested in it?
Why are people not actively talking about investing in it? By talking to our on-the-ground team and looking at data, there are actually a few potential reasons why people are not attracted to it. The first thing is the suburb itself is sort of isolated. While it is straightforward if you travel from Melbourne CBD to Kularu through Dallas, it is actually inconvenient if you travel from the west into the suburb because it is actually separated from the western suburbs by the rail line. To some buyers, especially on occupiers, that might be one of the factors making this suburb less attractive.
The second factor could be that there's no nice lifestyle in the suburb of Kularu. On the eastern side of Kularu, there's industrial sites, and inside of the suburb, you don't have nice cafes, shops, basically what you would like to have close to your home. So that could be another reason why people, especially on occupiers, are showing less interest in Kularu. A third reason could be the relatively lower socioeconomic status. If we look at unemployment rate of the suburb, it is around 17.
2%. While that is not really rare for the LGA of Hume, still it is high enough to prevent potential buyers, including investors and on occupiers, from being interested in this area. That being said, unemployment rate is never a dominating factor because some of the most sought-after suburbs in this area, including Meadow Heights, also have really high unemployment rates. Kularu also has a relatively high crime rate compared to other parts of Melbourne. I'm using red suburbs as a reference.
According to data here, property crimes per 1,000 people in Kularu is 101 compared to Victoria's 42 per 1,000 people and Australia's average of 38 per 1,000 people. In general, the number of crimes per 1,000 people in Kularu is 159. That is compared to Victoria's average 70 and Australia's average of 81. All these numbers do show that socioeconomic status of Kularu is not really high there. So that is another reason why some investors, some on occupiers, would want to avoid buying in this suburb.
But here's the thing. Does lower interest from buyers necessarily lead to poor performance? Data actually says no. I'm going to show you from both capital growth perspective and rental market perspective. Now first, property value growth.
In the past year, Kularu's house price increased by 12. 1%. At the same time, Meadow Heights, the really popular suburb just next to it, received a 13. 3% annual growth, just slightly higher than Kularu. And another neighboring suburb, Dallas, got a 11.
9% annual growth, very close to Kularu, slightly lower. Broadmeadows, another big suburb in the area, received a 8. 4% annual growth in terms of house value. Putting these together, there's no significant difference between Kularu and the more sought-after suburbs. And that was the short-term growth.
How about long-term? In the past 20 years, the SA3 of Tullamarine Broadmeadows saw house prices increased by 204% in total. During the same period, Kularu's house prices increased by 215%. There's an 11% difference between the two, but over a period of 20 years, that is actually essentially in line with each other. How about the other suburbs?
Meadow Heights, 187% total growth. That is slightly lower than the SA3 average. Dallas, 208%, very much in line. Broadmeadows, 201%, again, very much in line with the SA3's long-term growth. So now we see even in the long-term, Kularu's performance was really in line with the surrounding suburbs and the overall region performance, and even slightly better than the rest.
And in the rental market, in the past year, Kularu's rental prices increased by 1%. That doesn't sound really good. And let's look at other suburbs. Meadow Heights, 3%, slightly better than Kularu. And then Dallas, 0%, basically no growth ever since January 2025.
Broadmeadows, also 1%, the same as what's happening in Kularu. So from here, we can see that Kularu's lack of interest from buyers is not really causing any underperformance in both sales price performance and rental price performance. By the way, the lower rental growth across this region is essentially because of two things. One is the previous surge in rental prices in 2023 and 2024, having caused the local rental prices reaching this affordability ceiling. And second reason is vacancy rate in this broad area has been increasing since 2024, now sitting at around 1.
8, 1. 9%, already slightly above the Melbourne's average. And by the way, this increase in vacancy rates is not unique to the Tullamarine area. Across Melbourne, we actually have seen some areas with increasing vacancy rates, and we're actually closely monitoring it to make sure we're not buying in any suburbs with alarmingly high vacancy rates that could hurt rental growth or rental vacancy periods. So that's the story about Kularu.
While on the surface, it is not receiving as high interest from buyers as the surrounding suburbs, and it has seemingly disadvantages in terms of lifestyle, being isolated, or having lower socioeconomic status, all those factors have turned out to be just noises when we examine the long-term and short-term performance in both price growth and rental performance. So the key message here is that when we look at markets, when we select suburbs, it's easy to be distracted by non-fundamental factors. We want to stick to the fundamentals, the demand and supply, and focus on the indicators that really matters. For example, days on market, inventory levels, vacancy rates, that can actually show the real signs of growth potential, either in the short term or in the longer term. So that's it about Kularu.
I'm Junge Ma, the senior research analyst here at InvestorKit. I'll see you next time.
