Whether you’re a seasoned investor looking to add to your growing portfolio, or a first timer wanting to dip your toes in the waters, the Melbourne property market always presents an enticing option when it comes to investing your money.
High rental yields might be here to stay for a while yet
Like so many capital cities across the country, the rental market in Melbourne continues to be scorching hot. Rental prices through all suburbs continue to soar, namely in the inner city. These record high rental prices, coupled with low vacancy rates and dip in median property pricing, is a recipe for success for those searching for an investment with enticing rental yields.
It's pretty easy to calculate your gross rental yield on your investment property. What you do is divide the gross annual income by the purchase price of the property and multiply it by 100. For instance, if you purchased the property for $500,000 and rented it out for $550 a week ($28,600), your gross rental yield would be a very healthy 5.2% ($28,600/$550,000 x 100).
Looking at Melbourne’s CBD for instance, it currently has a median rental yield of $630 per week, with a median unit/apartment price of only $560,000. This equates to a very handsome rental yield of 5.85%. Nearby Carlton has an even more impressive yield of 7.3%, while Travancore offers a 7% yield. Other suburbs to look at with impressive rental yields include Southbank, Box Hill, Notting Hill, and Abbotsford.
Time to invest in Melbourne’s inner city.
Suburbs surrounding the CBD have taken the brunt of median price drops over the last few years, which makes these areas prime for seasoned and new investors to snap up some bargains.
As mentioned in the Metropolitan Market Outlook, the suburb of Carlton is incredibly undervalued as of July 2024, with a median unit price of $392,000. Sitting right on the cusp of the city, Carlton is one of the premier suburbs in Victoria, and has easy access to renowned universities, iconic Lygon Street, beautiful parklands, and a range of public transport options. What also makes Carlton an enticing investment option is the fact that median rental price is currently $550 per week.
“If you’re going to play in a market, you play in a market that’s hit the bottom where there’s opportunity for growth, so that’s now, while Melbourne dwelling prices have stagnated,” Southbank-based property research company RPM National Managing Director Luke Kelly said in an article in the Australian Property Investor magazine. “We believe there’s the opportunity to buy now; go in and get yourself a good deal because that shift is going to come where demand will outpace the supply over the next 12 to 24 months,” Mr Kelly said.
Other undervalued inner-city areas which need to be looked at from an investment standpoint (all down on median unit pricing over the last five years) include West Footscray, North Melbourne, Brunswick West, Windsor, and St Kilda.
Hotspotting’s top growth suburbs revealed
Hotspotting, one of Australia’s top independent real estate analysts, revealed a list of suburbs across Australia that are primed for home price growth over the next 12 months.
Hotspotting’s winter Price Predictor Index (PPI) is based on trends in data, and is a forward-looking tool to identify locations in growth or decline, with the aim of helping buyers to decide where they should invest next. It’s based on a simple premise – the number of sales comes first, and then prices react.
A number of Victorian suburbs were listed by Hotspotting, with many of these areas more rural including Ballarat East, Bacchus Marsh, Darley, and Torquay. But there was a select few Melbourne suburbs on the list, including Deer Park which has seen five consecutive quarters of growth while still remaining affordable to many buyers. Other suburbs on the list included Sandringham, Blackrock, and Sydenham.
Finding more affordable rental just got easier
Life just got a little easier for prospective renters searching for an affordable rental online, with realestate.com.au introducing its new ‘affordability’ filter. The new filter enables consumers to search for properties that fall under specific rental affordability schemes, such as the National Rental Affordability Scheme (NRAS). This won’t only make life easier for prospective renters, but rental providers as well wanting to get their property rented out faster.
“For those who are eligible for specific rental affordability schemes, our new affordable housing search filter is designed to ease some of the stress of finding a new home,” said REA Group General Manager of Product Jarrod Scott to Elite Agent.
In Melbourne, the charm of warehouse conversions has not only been preserved but celebrated, making them a cherished option among homebuyers. These once bustling industrial sites now serve as bespoke residences, creating spaces that are as characterful as the city itself.
In the pursuit of transforming houses into homes, Australians have access to a splendid array of homeware brands that offer unique aesthetics and quality craftsmanship. Whether looking to add a touch of elegance, a splash of colour, or a statement piece, these brands cater to every design vision.
Fireplaces have long been cherished as the heart of the home, providing both warmth and a cosy gathering spot. Historically essential in every period home, they featured prominently from kitchens to bedrooms.
Whether it’s window-shopping at boutique stores, people-watching from a cafe, or enjoying a sundowner from a rooftop bar, Melburnians often find their happiest moments along these bustling locales.
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