By Rich Harvey, CEO & Founder, propertybuyer.com.au
The past two years have seen extraordinary value gains made across the Melbourne market with double-digit growth fuelled by incredible demand and limited supply. Beautiful property is plentiful here but buying it of late has been a challenge.
Now, the threat of rising interest rates coupled with world events are telegraphing a slowdown – but unless you live and breathe this city, you won’t understand its market.
That’s why I go to a great local source for my information. Propertybuyer’s very own Melbourne-based buyers’ agent, Amanda Jones, says activity at ground level is still hot because buyers vastly outnumber the supply of good-quality listings.
This will have some people thinking they’ve missed the boat on buying well in Melbourne. “The capital gains horse has bolted, and there’s little chance of finding something with growth potential,” they’ll reason.
Not true, according to Amanda. Markets are more complex than this. While one suburb slows, another is just warming up.
To prove it, here are Amanda’s five pick locations for capital growth potential in Melbourne.
1. Langwarrin
Positioned around 40 kilometres southeast of the CBD, Langwarrin is a family-friendly suburb primed for house price growth. The annual median house price for 2021 came in at $840,000 which was a sharp rise on the $660,000 median in 2020. That said, the area remains ripe for family buyers to drive prices higher.
Many of the suburb’s older residents will move out in the coming years opening Langwarrin up to more opportunities and gentrification potential.
There is chatter about a future rail connection too, which bodes well for growth.
Langwarrin is the gateway to the peninsula and is next to Frankston, which makes it prime as a ‘next growth’ address.
There’s a wide range of property available from smaller blocks through to semi-rural holdings. It’s family-appeal credentials are assured by good quality schools, excellent retail and easy access to the freeways allowing direct routes to the city and south.
2. Dandenong North & Noble Park North
These adjacent suburbs are located approximately 25 kilometres southeast of Melbourne’s CBD. The variety of housing here brings in the $800,000 to $1.2-plus million buyers. Big homes on good size blocks and solid 1980s construction are the main drawcard.
Put simply, there’s great bang for buck in both suburbs.
The area has appealing private schools too which attract families, as does the abundance of parklands.
There’s great retail at Dandenong Shopping Centre, and the freeway provides a 25-minute trip to the heart of Melbourne.
There’s another opportunity here too. Good-quality rental listings are rare but in demand. So, if you are an investor, there’s an opportunity to secure a great standard of tenant willing to pay a premium price.
3. Berwick
Berwick is located 50 kilometres southeast of the CBD and is a bit of an under-the-radar gem in this region.
Big blocks of land are the hallmark of Berwick. That said, encroachment of higher density development via nearby suburbs makes it feel like the city is moving ‘closer’.
There’s a lot of infrastructure out here for sports and recreation as well, so families are loving the space for their kids.
$800,000 to $1.2 million will get you a great home on a 600-plus square metre block.
Berwick also feeds off the popularity of its more expensive neighbours. For example, Clyde North buyers will pay $600,000 to $800,000 for a 300 square metre site. But head just a couple of suburbs out to Berwick and you can secure an established home for the same sort of money.
4. Cheltenham
Cheltenham’s unit market presents an opportunity to buyers.
Apartments have copped a fair bit of criticism over the past few years. Overbuilding and substandard construction have made it a less attractive options for buyers. But there’s a noticeable turnaround in demand for good quality units in certain locations. Because of this, Cheltenham is proving to be good buying right now.
For starters, Southland Shopping Centre is the major retail hub. Cheltenham is on the Dandenong line and has both Cheltenham Station and Southland Station as options. There’s also a chance (depending on which government is in power) of an underground railway being established in the future.
Cheltenham has a tick list of appealing fundamentals – close to the beach, close to Mentone and its school zone, an easy 20-minute trip to the city and lots of parks and shopping.
You’ll get really good quality 1970s villa units – 120 square metres of living area – behind Southland Shopping Centre for $650,000 to $750,000. Much of the demand for these is fuelled by first homebuyers who’ve been priced out of detached homes.
5. Highett
Highett is adjacent to the very ritzy suburb of Sandringham, and this makes it an excellent ‘bridesmaid’ location for unit buyers.
Highett has lifestyle facilities that will appeal to large swathe of unit buyers. This includes amazing restaurants, so foodies love it here.
It’s on the train line so city access is a breeze, but you’re also close to the beach and parklands. It’s the best of all worlds.
Highett has a distinct ‘corporate’ demographic with a reputation for safe, secure living. It’s a great feel here with lots of ex-pats moving in and enjoying the walkability of the suburb.
When you consider the prices others pay for near-water locations in Sydney and Melbourne, then Highett is an excellent value proposition. You can buy units here from $600,000 to $700,000 making it a great alternative to its more expensive neighbours.
There you have it. Five excellent options for any buyers looking to secure capital growth in Melbourne. Of course, selecting a location is just one part of the equation. Choosing and securing the right property within that address is crucial. The most efficient way to achieve a wonderful outcome is to draw on the skills of an experienced, well connected local buyers’ agent like Amanda. She has the knowhow and networks to ensure you get an extraordinary result when it come to your next property purchase.
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