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Find out if you own in one of the Melbourne suburbs that are best placed for good yields, short delays getting new tenants and price growth.
Melbourne’s top investor hotspots for this spring have been revealed in a hit list of mostly affordable suburbs that will put would-be landlords head to head with first-home buyers.
But Victoria has been snubbed in national analysis, with only the regional town of Red Cliffs just outside of Mildura making the top 100 places in Australia to buy a house as an investment right now — and dismally placed at 85th.
Meadow Heights tops the Melbourne list with a $626,000 median house price, followed by Cranbourne South at $780,000 and Hastings on the Mornington Peninsula where the typical house costs $690,000.
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The PropTrack research tracks areas that offer the best combination of rental returns, rising home values and how long it typically takes to lock in a new tenant.
Economics executive manager for the firm Angus Moore said at the national level, regional and outer suburban areas had achieved a narrow majority — mostly due to their higher typical rental returns compared with purchase prices, and limited supply making it more likely homes will be tenanted rapidly.
“Meanwhile, some of those inner city unit markets, which do tend to carry, on average, higher rental yields than detached houses, haven’t seen the price growth,” Mr Moore said.
“In Sydney and Melbourne, that has been true for those more outlying suburbs. And so they are at a lower price entry price point.”
2 Chappell Return, Meadow Heights, has a $640,000-$670,000 asking price in a suburb where local agents say investors will bid hard up to $700,000.
Maribyrnong is currently Melbourne’s top spot to own a unit as an investment. No. 35 Cavalry Circuit is for sale at $470,000-$517,000.
He added that while these unit prices had not performed as strongly in recent years, in part because Melbourne just builds more new homes than other major capitals, there were now large gaps between them and houses — which could make units more appealing for price-conscious buyers.
Mr Moore said there could still be good opportunities for investors in Victoria, it just wasn’t prominent in the data because prices hadn’t performed as well as other states in the past year.
“And Victoria, over the past few decades, has seen more people moving in than leaving,” Mr Moore said.
“That flipped during the pandemic, when there were quite sizeable outflows of population. That’s come back to more of a balance. At the moment, there’s about as many people moving out as moving in, which will probably help a recovery in home prices.”
While he wasn’t tipping significant immediate term growth for the state, Mr Moore said over the next decade it would “pick back up and catch up”.
15 Authentic Ave, Cranbourne South, is in Melbourne’s second best suburb for investors right now. It’s currently for sale with a $770,000-$840,000 asking price.
Inside 2 Chappell Return, Meadow Heights, the views on offer add to the already appealing numbers behind the area’s recent success for investors.
In Meadow Heights, the city’s top spot for investors right now, McGrath Real Estate’s Gurbaj Sandhu said the key to high tenant demand was its proximity to Melbourne Airport — either for employment or travel reasons.
“But investors are super active in the area now,” Mr Sandhu said.
“They had overlooked it and now it is becoming a hot spot.”
While the demand from investors, especially from interstate, had been building steadily since February’s first interest rate cut, the agent said it had gone up a notch recently.
“They are coming in strong for investments with big land and the possibility of subdivision down the track; they will outbid everybody up to $700,000,” Mr Sandhu said.
He added that there was similar demand further north in Craigieburn, which was ranked Melbourne’s 13th best spot for investors right now by PropTrack.
Real Estate Institute of Victoria acting chief executive Jacob Caine said flat or negative prices might have kept Melbourne out of the top lists this year, but that was likely to change.
Affordable Jacana’s high rental yields have helped land it a spot on the list of the best places around town to own an investment. 145 Langton St is up for grabs at $590,000-$649,000.
On the Mornington peninsula, homes like 2 Jillian Place, Hastings, could stack up well for investors with a $780,000-$850,000 asking price far below what homes cost in Sydney.
“The brutal reality of the Victorian property market from the investor’s perspective for the past 12 months is that there hasn’t been that many opportunities to realise a fantastic return on investment, based on these metrics,” Mr Caine said.
“The silver lining of these results is that Victoria is poised to grow quite significantly over the next 12 months.
“And compared to our northern and western neighbours, high quality properties are more affordable and the opportunity to realise future capital gains are there waiting for those considering property investment this year.”
Prominent buyer’s advocate Cate Bakos said she wasn’t surprised to hear an area like Red Cliffs make the national top 100, as the regional area would have very high rental demand.
And, with home prices relatively flat over the past year, Ms Bakos was also unsurprised Victoria didn’t feature more prominently.
“But our vacancy rates are really tight and our rental yields have increased,” she said.
Units in Broadmeadows offer one of the most affordable ways to get into a suburb with strong investment credentials right now. This three-bedroom home at 2/25 Stanhope St is for sale with a $590,000-$639,000 asking price.
Homes like 27 Fulmar St, Carrum Downs, can stack up for investors at present — and its considerably more affordable than its $1m neighbour Carrum, also among the top spots.
And while Ms Bakos said she believed capital growth would improve, given the high level of first-home buyer activity in Victoria at the moment — it was likely this would start at the bottom of the market, and be compounded by investors.
“Unfortunately, I think these areas will definitely be a battleground between investors and first-home buyers, certainly in the metropolitan areas and the big regional cities,” she said.
For those wanting to get the best long-term results, she advised looking at the individual house level — rather than the suburb.
Real Estate Buyers Agent’s Association of Australia president Melinda Jennison said short term data could often indicate good conditions — but it was important to remember that buying property for wealth creation was a 10-15 year process.
To spot areas with better long-term prospects, she advised looking for notable infrastructure projects nearby — as well as for how much development activity was in the local pipeline.
Ms Jennison added that despite Victoria being largely excluded from the nation’s top investment spots, it wasn’t surprising it was attracting investors from interstate.
One of the newest suburbs in the list, Sandhurst has had solid growth but still has a strong rental yield. The home at 6 Penley Lane is seeking at $745,000-$795,000 sale.
34 Stead Circuit, Burnside, is for sale at $780,000-$850,000 — around the suburb’s $795,000 median house price, which has grown 11 per cent in the past year.
MELBOURNE’S TOP INVESTMENT SPOTS: HOUSES
Suburb
12 month % growth
Rental yield
Days on market
Median sale price
Meadow Heights
8%
4.5%
25
$626,000
Cranbourne South
7%
4.3%
21
$785,000
Hastings
6%
4.4%
23
$690,000
Sandhurst
6%
4.1%
17
$1,080,000
Jacana
8%
4.1%
20
$620,000
Cranbourne West
5%
4.4%
24
$695,000
Dallas
5%
4.6%
26
$555,000
Melton South
7%
4.3%
34
$525,000
Burnside
11%
4.0%
25
$795,000
Carrum Downs
4%
4.3%
18
$728,000
Carrum
16%
3.8%
24
$1,025,000
Frankston North
6%
4.2%
27
$625,000
Broadmeadows
4%
4.4%
30
$596,000
Craigieburn
4%
4.4%
27
$667,000
Keilor Downs
6%
4.0%
22
$807,000
Campbellfield
4%
4.3%
28
$643,000
Lyndhurst
7%
4.0%
27
$935,000
Lynbrook
5%
4.1%
26
$785,000
Gladstone Park
5%
4.0%
23
$750,000
Deanside
6%
4.2%
34
$648,000
Source: PropTrack
101/51 Homer St, Moonee Ponds, is for sale with a $550,000-$595,000 asking price in one of the best areas to own one as an investment today.
12/37 Grange Rd, Fairfield, is in another part of Melbourne where investors are doing well. The two-bedroom home’s asking price is $519,000.
MELBOURNE’S TOP INVESTMENT SPOTS: UNITS
Suburb
12 month % growth
Rental yield
Days on market
Median sale price
Maribyrnong
7%
6.0%
22
$490,000
Moonee Ponds
7%
5.7%
21
$561,000
Broadmeadows
6%
5.7%
22
$455,000
South Yarra
5%
6.1%
21
$569,000
Carnegie
5%
5.3%
17
$630,000
Meadow Heights
10%
5.4%
30
$490,000
Carlton
4%
7.7%
25
$418,000
Notting Hill
4%
6.9%
22
$362,000
Fairfield
6%
4.9%
14
$580,000
Clayton South
7%
4.9%
20
$573,000
Thomastown
6%
5.0%
21
$523,000
Craigieburn
4%
5.6%
21
$422,000
Bundoora
3%
5.7%
20
$450,000
Yarraville
5%
4.8%
18
$631,000
Coburg
4%
5.1%
18
$570,000
Kingsville
3%
5.5%
21
$410,000
Maidstone
5%
5.0%
23
$645,000
Glen Huntly
3%
5.2%
16
$608,000
Cremorne
2%
5.9%
16
$590,000
Carrum Downs
5%
4.8%
20
$585,000
Source: PropTrack
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