Five Melbourne suburbs where you can still buy a three-bedroom house for under $600k
With property prices surging to record highs over the pandemic and the median house price in Melbourne nearing $1.1 million, breaking into the property market is as hard as it’s ever been.
Property
With property prices surging to record highs over the pandemic and the median house price in Melbourne nearing $1.1 million, breaking into the property market is as hard as it’s ever been.
In recent months, the RBA has raised the cash rate sharply in an effort to curb inflation. Whilst this will continue to apply downward pressure on property prices, plenty of buyers will still find themselves priced out of much of suburban Melbourne.
Luckily for younger property investors, there are still areas left that meet key investment criteria - you just have to know where to look.
Here are five Melbourne suburbs that still offer affordable investment opportunities.
1. Werribee
Unlike many neighbouring suburbs which have only been developed in recent decades, Werribee was established over 150 years ago.
From a lifestyle perspective, Werribee has a lot going for it - particularly for families and young couples looking for affordable lifestyle solutions.
With amenities, parklands, the beach and the zoo all nearby, Werribee’s relatively low price could be seen as a good opportunity for property investors.
Despite being located 28km from the CBD, Werribee locals have great access to public transport, including express train services into the city.
Looking further ahead, Werribee will benefit from planned upgrades to our current rail services. This includes an upcoming fast rail between Geelong and Melbourne, and the proposed Suburban Rail Loop which (if it gets official approval) will be an underground train line connecting Werribee to the Airport and other outer-Melbourne suburbs.
Median house price: $600,000
Median three-bedroom house price: $563,250
Median unit price: $407,500
Median rent (house): $360
Average rental yield (house): 3.0%
10-year average annual growth: 7.1%
2. Broadmeadows
For buyers not wanting to move too far from the city, Broadmeadows has maintained relative affordability despite being located within 20km of Melbourne’s CBD.
Although Broadmeadows has had historically slower capital growth compared to many other areas in Melbourne, investors with a long-term view may see significant potential in this developing suburb.
Whilst the area has long had a poor reputation in regard to crime, demographics have slowly been changing. Lifestyle factors such as proximity to education have improved dramatically, with centres like the Kangan Institute attracting younger residents to the area.
Adding to the potential, Broadmeadows is hoped to become a transport hub and is also part of future plans for the Suburban Rail Loop.
Whilst Broadmeadows may propose a somewhat riskier investment, the gentrification of surrounding areas does show signs of the potential for significant long-term rewards.
Median house price: $608,000
Median three-bedroom house price: $605,000
Median unit price: $495,000
Median rent (house): $340
Average rental yield (house): 3.6%
10-year average annual growth: 6.55%
3. Officer
Over the last few years, Officer has emerged as one of the fastest-growing suburbs in the Melbourne metropolitan area.
The surge of demand in the area has already led to significant capital growth, including a nearly 24% annual growth rate in Officer over the last five years.
Behind this surge are the many lifestyle drivers the suburb has going for it. Local schools, parks and good access to amenities have made Officer a popular place for young families who have been pushed to the outer suburbs through affordability constraints.
Despite its distance from the city, Officer’s proximity to the Pakenham line and the Princes Freeway has helped connect residents to the rest of Melbourne.
For property investors, the prospect of strong capital growth and quality tenants at a low price point makes Officer a suburb to keep on your list.
Median house price: $738,000
Median three-bedroom house price: $627,000
Median unit price: $509,000
Median rent (house): $340
Average rental yield (house): 3.3%
10-year average annual growth: 6.56%
4. Melton
If price is your biggest consideration, then consider Melton for your next investment.
Melton has some of the cheapest property on the Melbourne market, largely due to being located 35 kilometres away from the city.
But despite the restraints of its location, Melton still offers locals decent schools, proximity to the airport and a train line straight into the city.
From a pure investment perspective, house prices in Melton have an annual growth rate of 10 per cent over the last five years, as well as a 4.1 per cent rental yield. Adding to this, recent forecasts from population experts have estimated the City of Melton’s population will more than double by the year 2050.
If you’re looking for larger blocks of land at a low price point, Melton might be a good place to start.
Median house price: $502,000
Median three-bedroom house price: $489,500
Median unit price: $368,000
Median rent (house): $320
Average rental yield (house): 3.3%
10-year average annual growth: 6.56%
5. Cranbourne
Like most of the other suburbs on this list, Cranbourne was once considered to be past the outskirts of the Melbourne metropolitan area. After undergoing a significant overhaul in recent decades, many now view the suburb as a desirable place to reside inside of Melbourne.
Although located over 40 kilometres outside the city, Cranbourne presents an attractive alternative for those who prefer quieter outer-suburban lifestyles. Boasting access to good-quality schools, parks, shopping centres and its own train line, the suburb ticks many of the boxes that buyers are looking for.
These lifestyle drivers have resulted in steady population growth and respectable gains in property prices.
Still, Cranbourne remains an affordable solution for investors searching for a cheaper entry point into the market. With the median three-bedroom home selling at $620,000, there appears to be plenty of capital growth in Cranbourne yet to come.
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