---
title: "Clyde North: The Suburb Every Agent Loves and Every Spreadsheet Destroys"
description: "Clyde North added 7,000 homes in five years, vacancy hit 4.5%, and prices grew just 1% over three years. Inside the data that agents won't show you, and why new-build suburbs trap investors."
author: Yan Zhu
date: 2025-01-02
category: Scam / Warning
url: https://premiumrea.com.au/blog/clyde-north-data-warning-oversupply-trap
tags: ["Clyde North", "oversupply", "new build trap", "vacancy rate", "Melbourne southeast", "property warning", "land value"]
---

# Clyde North: The Suburb Every Agent Loves and Every Spreadsheet Destroys

*By Yan Zhu, Co-Founder & Chief Data Officer at PremiumRea — 2025-01-02*

> A client rang me last week. Said their agent was recommending a new-build in Clyde North. Great price, guaranteed rental return, close to the new Westfield. I opened my spreadsheet. Took about forty seconds. Then I told them to run.

It is 2023, and clients are still asking me about Clyde North.

At least twice a month, somebody contacts us after a selling agent has pitched them on a new-build package in one of the estates south of Cranbourne. The pitch always sounds the same: growing area, young families moving in, close to shops, strong rental demand. Sometimes they throw in the line about a future Westfield.

I am a trained actuary. I do not have opinions. I have data. And the data on Clyde North is, to put it plainly, grim.

Let me lay out the numbers and then explain why this suburb is a textbook case study in how supply-driven growth corridors destroy investment returns.

## The supply numbers are staggering

In the five years leading up to 2022, Clyde North added approximately 7,000 new dwellings to its housing stock [1]. That is roughly four houses per day. Every single day. For five years.

Think about what that means for the supply-demand balance. When you have nearly four new properties entering a market every day, the supply of available housing grows faster than the population can fill it. Rents stagnate because landlords compete for tenants. Prices stagnate because sellers compete for buyers.

And the pipeline is not slowing down. In the twelve months to mid-2022, over 2,000 new dwelling approvals were granted in the Clyde North corridor [2]. That is almost six new homes per day—an acceleration from the prior five-year average. The supply problem is getting worse, not better.

When I explain this to clients, some push back. They say: "But the population is growing. People are moving to the southeast. Surely demand will catch up." This is a seductive argument. It is also wrong. Population growth in a new-estate suburb does not increase property values if the housing supply is growing at the same rate. You need supply to be constrained relative to demand. That is the condition that creates scarcity. Clyde North has the opposite condition: unlimited land, unlimited approvals, unlimited supply.

## The price performance is damning

Over the three years to early 2023, the median house price in Clyde North grew by approximately 1% [3]. One percent. Total. Not per annum.

During the same period, Melbourne's broader median grew by approximately 8-12% depending on the segment. Established suburbs in the southeast corridor—Hampton Park, Cranbourne, Narre Warren—delivered 15-25% growth over the same window.

A 1% total return over three years, before you account for stamp duty, holding costs (council rates, insurance, land tax), and the opportunity cost of capital, means you went backwards. Materially backwards. If you held $700,000 in a high-interest savings account for three years at 4% per annum, you would have earned roughly $87,000 in interest. In Clyde North, your house might have appreciated by $7,000.

This is not a market timing argument. This is a structural one. Clyde North's price growth is suppressed by the same force that will continue suppressing it: unlimited supply in adjacent estates. Every new house-and-land package that goes up within a two-kilometre radius of your property is a competing product. And in Clyde North, there is no shortage of competing products.

## The vacancy and rental data tell the same story

As of early 2023, Clyde North's vacancy rate sits at approximately 4.5% [4]. For context, anything above 3% is considered a renter's market—meaning tenants have leverage, landlords do not. Below 2% is a landlord's market. The suburbs we invest in—Hampton Park, Cranbourne, Narre Warren—all sit below 1.5%.

A 4.5% vacancy rate means a significant number of investment properties are sitting empty at any given time. Landlords cannot fill them. When they do fill them, they accept below-market rents because the tenant has twenty other listings to choose from.

Median days on market for sales in Clyde North has blown past 55 days [5]. In comparison, Hampton Park properties sell in 24 days. Cranbourne averages about 28. When a suburb takes two months to sell a property, the market is telling you something. It is telling you there are too many options and not enough demand.

The rental story is equally bleak. New-build properties in estate suburbs typically carry higher rents on paper because of the novelty premium. But that premium evaporates the moment the next estate opens 500 metres down the road with an even newer display village. Your three-year-old "new build" is suddenly last season's model, competing against builder incentives and turnkey packages.

## The land value problem (and why it matters more than anything)

This is the part that most investors miss entirely, and it is the most important part of the entire analysis.

In Australian property investment, the only component of your asset that appreciates over time is the land. The building sitting on top of it depreciates—at roughly 2.5% per year, according to ATO guidelines [6]. This is not an opinion. It is an accounting reality enforced by the tax office.

When you buy a new-build in Clyde North for $700,000, your cost breakdown looks something like this: land component approximately $200,000-$250,000, construction component approximately $450,000-$500,000 [7]. That is a land-to-value ratio of roughly 30-35%.

Compare that to an established house in Hampton Park for $650,000 on a 640-square-metre block. Land component: approximately $520,000-$560,000. Building component: $90,000-$130,000. Land-to-value ratio: 80-86%.

The Hampton Park investor has 80% of their capital sitting in an appreciating asset. The Clyde North investor has 30% sitting in an appreciating asset and 70% sitting in something that loses value every single year.

Over ten years, at 7% annual land appreciation, the Hampton Park investor's land goes from $540,000 to approximately $1,062,000—a gain of $522,000. Meanwhile, their building has depreciated from $110,000 to perhaps $83,000. Net position improvement: roughly $495,000.

The Clyde North investor's land goes from $225,000 to approximately $443,000—a gain of $218,000. But their building has depreciated from $475,000 to approximately $356,000—a loss of $119,000. Net position improvement: roughly $99,000.

That is a $396,000 difference in wealth accumulation over a decade, from a similar starting investment. And I have been generous with the Clyde North land appreciation assumption—because unlimited supply in adjacent estates will almost certainly suppress land values below the metropolitan average.

> "The data on Clyde North is unambiguous," says Yan Zhu, Co-Founder and Chief Data Officer at PremiumRea. "4.5% vacancy, 1% total price growth over three years, and a land-to-value ratio of barely 30%. Every dollar you put into a new-build there is fighting against the arithmetic of depreciation."

## But what about the future Westfield?

I get this question so often I should print the answer on business cards.

Cranbourne already has a major Westfield shopping centre. It is enormous. It is ten minutes from Clyde North. Why would Westfield build another one in direct competition with their existing asset? They would be cannibalising their own foot traffic [8].

When a selling agent tells you "they are building a Westfield nearby," you need to ask: is this confirmed in council planning documents, or is it something the estate developer mentioned in their marketing brochure? There is a chasm between the two.

Even if a retail development does eventually materialise, the timeline from announcement to completion is typically five to ten years. You are being asked to buy today, at today's prices, on the promise of something that may or may not happen in half a decade. And in the meantime, 2,000+ new homes per year are flooding the market around you.

> "If you have watched all my videos and you still want to invest in Clyde North," says Yan Zhu, "then I can only say that good advice is hard to take when someone is determined to ignore the numbers."

## Where to look instead

The established suburbs of Melbourne's southeast offer everything Clyde North cannot: constrained land supply, high owner-occupier ratios, proven capital growth, and vacancy rates below 2%.

Hampton Park: median around $630,000, 91% growth over ten years, 1.5% vacancy, blocks of 600+ square metres with side access for granny flat additions [9].

Cranbourne: similar price bracket, established infrastructure, and no meaningful new land release competing for buyers. When you buy in Cranbourne, you are buying scarcity. When you buy in Clyde North, you are buying into a conveyor belt of supply.

Narre Warren: slightly higher entry point at $720,000, but tenant quality is outstanding due to proximity to Fountain Gate (Melbourne's second-largest shopping centre) and the Cranbourne-Pakenham rail corridor.

All three suburbs deliver 4-5% gross rental yields after renovation, with land-to-value ratios exceeding 80%. And because new land supply in these suburbs is physically constrained—there is simply no vacant farmland left to subdivide—price growth is driven by genuine demand, not developer marketing.

The numbers do not lie. They never have. If you want to build wealth through property, buy where the land is scarce and the buildings are old. Not where the land is endless and the buildings are shiny.

## References

1. [Australian Bureau of Statistics, 'Building Approvals — City of Casey', 2017-2022. Clyde North approx. 7,000 new dwellings added in five-year period.](https://www.abs.gov.au/statistics/industry/building-and-construction/building-approvals-australia)
2. [City of Casey, 'Annual Development Activity Report 2021-2022'. Over 2,000 new dwelling approvals in the Clyde North corridor within 12 months.](https://www.casey.vic.gov.au/)
3. [CoreLogic, 'Suburb Performance — Clyde North', 2023. Median house price growth of approximately 1% total over three years to early 2023.](https://www.corelogic.com.au/)
4. [SQM Research, 'Residential Vacancy Rates — Clyde North', 2023. Vacancy at 4.5%, well above the 2% balanced market threshold.](https://sqmresearch.com.au/)
5. [Domain, 'Suburb Profile — Clyde North', 2023. Median days on market exceeding 55 days.](https://www.domain.com.au/suburb-profile/clyde-north-vic-3978)
6. [Australian Taxation Office, 'Residential Rental Properties — Depreciation of Buildings'. Building depreciation rate of 2.5% per annum for properties built after 1985.](https://www.ato.gov.au/Individuals/Investments-and-assets/Residential-rental-properties/)
7. [PremiumRea internal analysis. Typical new-build Clyde North cost breakdown: 30-35% land, 65-70% construction. Compared to established suburbs: 80-86% land.](#)
8. [Westfield Fountain Gate (Cranbourne). Melbourne's second-largest shopping centre by GLA, 10 minutes from Clyde North. No confirmed plans for competing development.](https://www.westfield.com.au/fountaingate)
9. [Real Estate Institute of Victoria (REIV), 'Median House Prices — Melbourne Suburbs', 2022. Hampton Park, Cranbourne, Narre Warren quarterly medians and historical growth.](https://reiv.com.au/property-data/residential-median-prices)

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Source: https://premiumrea.com.au/blog/clyde-north-data-warning-oversupply-trap
Publisher: PremiumRea (Optima Real Estate) — Melbourne buyers agent