Yes, the analysis of Melbourne's property market is included in our pack
The question of 'the best neighborhood to buy a property in Melbourne' does not have a one-size-fits-all answer.
Some of you are buying to live there, while others want to make the best investment possible. Individual preferences and circumstances matter.
That’s why the article below is covering every intent.
At BambooRoutes, when we write a blog post or when we update our our property pack for Australia, we want to bring solutions and cover different aims in a clear and organized way.
Enjoy the read, and please remember that we are not financial or investment experts. This article is for informational purposes only.
To improve the readability and user-friendliness of this article, we will categorize neighborhoods in Melbourne into various groups, including budget-friendly options, emerging hotspots, and areas with high rental demand, among others. Consequently, some neighborhoods may appear in multiple categories and be mentioned several times throughout the article.
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How is the real estate market in Melbourne?
The real estate market in Melbourne is a dynamic and attractive scene for various reasons, appealing to a wide range of buyers, including both locals and foreigners.
Let's delve into the specifics of what makes Melbourne's property market so unique and why people are keen to invest here.
Firstly, Melbourne is renowned for its distinct strengths that set it apart from other cities. It boasts a rich cultural tapestry, exemplified by its title as a UNESCO City of Literature, a recognition not held by many cities worldwide.
This cultural vibrancy is complemented by world-class educational institutions, like the University of Melbourne, which draw students and academics globally.
Additionally, Melbourne's commitment to sustainability and green living, with numerous parks and green spaces, adds to its allure, making it a magnet for those who value eco-conscious living.
The types of people looking to buy in Melbourne are diverse. Families are drawn to the city's safe neighborhoods and excellent schools, while professionals appreciate the thriving job market and cosmopolitan lifestyle. Retirees find the city's healthcare facilities and leisure activities appealing.
Notably, there's a significant interest from foreign investors, especially from the Asia-Pacific region. They're attracted by Melbourne's stable political environment, robust economy, and the potential for real estate as a secure investment.
The dynamism of Melbourne's real estate market is evident in its growth trends. For instance, despite global economic fluctuations, Melbourne has consistently shown resilience, with property values experiencing steady growth over the years. This trend indicates a healthy and robust market.
A unique aspect of Melbourne's properties is the prevalence of Victorian and Edwardian houses, which add a historical charm to the cityscape.
These heritage homes, often renovated with modern amenities, offer a blend of classic architecture and contemporary comfort – a combination hard to find elsewhere.
Looking into the future, several factors suggest that properties in Melbourne will continue to gain value.
The city's ongoing infrastructure development, like the Melbourne Metro Tunnel project, is set to enhance connectivity and make commuting easier, boosting property values in newly accessible areas.
The city's population growth, driven by both natural increase and immigration, ensures a consistent demand for housing.
Additionally, Melbourne's evolving economy, with sectors like technology and healthcare gaining prominence, is likely to attract more professionals to the city, further stimulating the real estate market.
Top neighborhoods in Melbourne to consider for living
Areas in Melbourne that are budget-friendly
If you're looking to buy property in Melbourne on a budget, there are a few neighborhoods you might want to consider.
Here is a summary table. Below, we will give more details.
| Neighborhood | Average Price per Sqm | Property Types | Potential for Value Increase | Resident Demographics | Strengths | Weaknesses |
|---|---|---|---|---|---|---|
| Frankston | Lower than inner suburbs | Single-family homes, townhouses | High (due to developments) | Diverse (families, retirees) | Beachside location, affordable | Some parts less safe |
| Sunshine | Reasonable | Older homes, newer apartments | High (due to transformation) | Multicultural community | Vibrant, multicultural | Socio-economic challenges |
| Melton | Quite low | Family homes, new developments | High (due to growth) | Young families, professionals | Spacious, growing amenities | Infrastructure catching up |
Frankston
Often considered a hidden gem in Melbourne's southeast, Frankston is known for its more affordable housing market.
Properties here are cheaper because it's a bit further from the city center, making it less appealing for those who prioritize proximity to Melbourne's core. However, with ongoing developments in public transport and commercial areas, property values have the potential to rise.
You'll mainly find single-family homes and townhouses in Frankston, with an average price per square meter that's significantly lower than Melbourne's inner suburbs. The area attracts a diverse mix of residents, from young families to retirees.
The beachside location is a major draw, but some parts of Frankston have a reputation for being less safe, which is a factor to consider.
Sunshine
Located in the western suburbs, Sunshine is another budget-friendly option.
It's traditionally been more affordable due to its industrial past and the perception of being less 'upmarket'. However, Sunshine is undergoing a transformation, with new infrastructure and transport links improving its appeal. This change suggests a likelihood of property values increasing.
The area predominantly offers older-style homes and some newer apartment complexes. The average price per square meter in Sunshine is reasonable, offering good value for the space.
Sunshine is home to a multicultural community, adding to its vibrant atmosphere. The downside is that some parts of Sunshine still grapple with socio-economic challenges.
Melton
Further out in the west, Melton is among the most affordable suburbs in Melbourne.
Its distance from the city center keeps prices down, making it a great option for first-time buyers or those on a budget. The potential for property value growth is tied to the suburb's ongoing development and population growth. In Melton, you'll mainly find spacious family homes and some new developments.
The cost per square meter in Melton is quite low compared to inner-city areas. The community is diverse, with many young families and professionals. While its distance from the city might be a drawback for some, Melton's growing amenities and community spirit are definite pluses.
However, it's worth noting that being a growth area, some infrastructure is still catching up.
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Areas in Melbourne that are popular and upscale
When looking to buy property in Melbourne, three neighborhoods stand out as upscale and popular choices. These neighborhoods each have their unique character and draw different types of residents.
| Neighborhood | Average Price/Sqm | Resident Demographic | Strengths | Weaknesses |
|---|---|---|---|---|
| Toorak | High | Wealthy Professionals, Celebrities | Exclusivity, Schools, Amenities | Cost |
| Brighton | High | Affluent Families, Business People | Beaches, Community, Schools | Price, Exclusivity |
| South Yarra | Variable | Young Professionals, Celebrities | Dining, Shopping, Nightlife | Noise, Busy Atmosphere |
Toorak
Toorak is the epitome of luxury in Melbourne.
Properties in Toorak are quite expensive due to the exclusivity and prestige of the area. You'll find grand mansions and modern high-end apartments. The average price per square meter in Toorak is significantly higher than in most other parts of Melbourne.
Residents in Toorak are typically wealthy professionals and celebrities. Strengths include top-tier amenities, excellent schools, and a sense of prestige.
However, the cost is a significant weakness, making it unaffordable for many.
Brighton
Known for its beautiful beaches and upscale lifestyle, Brighton is a highly sought-after suburb.
Property prices in Brighton reflect the high demand, with luxurious beachfront houses and elegant apartments. This area is expected to retain its popularity due to its scenic views and proximity to the city.
The demographic here is mainly affluent families and business people.
The strengths are its natural beauty, community feel, and high-quality schools. The downside is the high property prices and the perception of being a bit exclusive.
South Yarra
South Yarra combines urban living with luxury.
It's a hotspot for those who enjoy a vibrant lifestyle close to the city. The properties range from stylish apartments to opulent older homes. The price per square meter in South Yarra is high but varies depending on the exact location.
It's a diverse neighborhood, attracting young professionals, celebrities, and the fashion-conscious.
Its strengths are the great dining scene, shopping, and nightlife. The weaknesses include the busy atmosphere and potential noise levels.
Make sure you understand the real estate market in Melbourne
Don't rush into buying the wrong property in Australia. Sit, relax and read our guide to avoid costly mistakes and make the best investment possible.
Areas in Melbourne that emerge as new hotspots
Let's explore these emerging neighborhoods in Melbourne that, according to our local partners and our customers, are getting quite a bit of buzz lately.
| Neighborhood | Current Price Trend | Resident Demographic | Strengths | Weaknesses |
|---|---|---|---|---|
| Footscray | Rising | Young Professionals, Artists | Cultural Diversity, Food Scene | Gentrification |
| Brunswick | Rising | Students, Young Families | Artistic Vibe, Transport | Development, Congestion |
| Coburg | Rising | Families, Professionals | Community, Green Spaces | Developing Identity |
Footscray
Initially known as a working-class suburb, Footscray has been transforming rapidly.
It's becoming a trendy spot thanks to its multicultural vibe and vibrant arts scene. The property prices in Footscray are more affordable compared to more established suburbs, but they're increasing as the area gains popularity.
You'll find a mix of older homes and new developments in Footscray. The demographic is shifting to include young professionals and artists.
The strengths are its cultural diversity, food scene, and proximity to the city. However, it's still in the process of gentrification, which can be a weakness.
Brunswick
Brunswick's evolution from an industrial area to a hip neighborhood is notable.
It's attracting people with its alternative culture, music scene, and great cafes. While prices are lower than in prime areas, they are rising due to its growing popularity.
The area features a mix of old and new housing, appealing to a diverse crowd from students to young families.
Strengths include its artistic vibe and great public transport. Weaknesses are the ongoing development and occasional congestion.
Coburg
Coburg, once overshadowed by its more popular neighbors, is now emerging as a desirable location.
It offers a more relaxed atmosphere with a mix of traditional homes and modern units. Prices in Brunswick are relatively affordable but are expected to rise.
The area attracts a diverse demographic, from young families to professionals. Strengths are the community feel, green spaces, and good schools.
A weakness is that it's still developing its identity and amenities.
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Top neighborhoods in Melbourne to invest in property
Areas in Melbourne with a strong rental demand
If you're considering buying real estate in Melbourne for renting it out, these neighborhoods with high demand for rentals should be considered.
| Neighborhood | Target Tenants | Property Type | Average Rental Income (Per Week) | Rental Yield | Tips for Maximizing Income | Weaknesses |
|---|---|---|---|---|---|---|
| South Yarra | Young professionals, Affluent tenants | Modern apartments, Upscale townhouses | $450 - $600 | 3-4% | Near CBD, Balcony, Parking | High competition, Frequent maintenance |
| Brunswick | Students, Young professionals, Families | Apartments, Heritage houses | $550 - $700 | 3.5-4.5% | Eco-friendly features, Near Sydney Road | Price rise, Seasonal vacancies |
| Docklands | Corporate tenants, City workers | High-rise apartments | $400 - $550 | 4-5% | Water views, Luxury fittings | High body corporate fees, Apartment oversupply |
South Yarra
South Yarra is a hub for young professionals and affluent tenants, making it a prime area for long-term rentals.
Properties in demand in South Yarra are modern apartments and upscale townhouses, with a preference for features like balconies and parking spaces. The average rental income for a two-bedroom apartment in South Yarra can range from $450 to $600 per week, leading to a rental yield of approximately 3-4%.
The neighborhood's proximity to the CBD, vibrant cafe culture, and high-end shopping options are key attractors. However, competition can be stiff, and properties might require more frequent maintenance due to higher standards expected by tenants.
To maximize rental income, focus on well-maintained properties near public transport and lifestyle amenities. Be aware, though, that the market can fluctuate with economic changes, impacting rental yields.
Brunswick
Brunswick attracts a diverse mix of students, young professionals, and families, looking for a blend of urban and community living.
The demand in Brunswick is for both apartments and heritage houses, with a strong preference for eco-friendly features. Rental income for a three-bedroom house in Brunswick ranges from $550 to $700 per week, offering a yield of around 3.5-4.5%.
Its appeal lies in the bohemian lifestyle, multicultural atmosphere, and excellent public transport links. To capitalize on rental demand, consider properties near Sydney Road or properties with unique features like a backyard or studio space.
However, as Brunswick becomes more popular, property prices are rising, and there may be periods of vacancy during student off-seasons.
Docklands
Docklands is popular among corporate tenants and city workers due to its modern amenities and proximity to the CBD.
High-rise apartments, especially those with water views or luxury fittings, in Docklands are in high demand. Rental incomes for a one-bedroom apartment in Docklands hover around $400 to $550 per week, translating to a yield of about 4-5%.
The area's drawcards include waterfront living, contemporary lifestyle, and easy access to work and entertainment zones. To optimize rental income, focus on newer buildings with facilities like gyms or pools.
However, be mindful of the higher body corporate fees and the potential oversupply of apartments, which can affect rental prices.
Don't lose money on your property in Melbourne
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Areas in Melbourne where property prices might increase in the future
In these areas in in Melbourne you can still find properties at a reasonable price, with room for appreciation as the neighborhoods develop.
| Neighborhood | Tenant Type | Property Type | Average Price (Per Night) | Tips for Maximizing Income | Weaknesses |
|---|---|---|---|---|---|
| Melbourne CBD | Tourists, Business travelers | Furnished modern apartments | $100 - $200 | Unique views, Close to attractions | High competition, Seasonal demand |
| St Kilda | Holidaymakers, Weekend visitors | Studios, One-bedroom apartments | $90 - $150 | Outdoor spaces, Close to beach | Quieter in winter |
| Fitzroy | Creative, Cultural crowd | Lofts, Renovated warehouses | $80 - $130 | Unique design, Near cafes/bars | Noise issues |
Melbourne CBD
The CBD is a hotspot for short-term rentals, attracting tourists and business travelers.
The demand in Melbourne CBD is mainly for furnished, modern apartments that offer convenience and easy access to attractions. Amenities like Wi-Fi, air conditioning, and proximity to public transport are highly valued.
Average prices per night in Melbourne CBD can range from $100 to $200, depending on the property and season. To enhance rental income, focus on properties with unique views or those close to key tourist spots.
However, be aware of the competition and seasonal variations in demand.
St Kilda
Known for its beaches and vibrant nightlife, St Kilda is popular for holidaymakers and weekend visitors.
Short-term renters often look for properties with a relaxed, beachy vibe, including studios and one-bedroom apartments. Essential amenities include parking and proximity to the beach.
The average price per night in St Kilda is around $90 to $150. To maximize rental income, properties with outdoor spaces or unique character are preferable.
However, the area can be quieter in winter, affecting occupancy rates.
Fitzroy
Fitzroy appeals to a creative and cultural crowd, with short-term demand for quirky, artistic spaces like lofts or renovated warehouses.
Proximity to cafes, bars, and art galleries is a major draw. Rental prices per night in Fitzroy can vary from $80 to $130.
To capitalize on rental demand, focus on properties with unique architectural features or interior designs.
However, there can be noise issues due to the bustling nightlife, which might not appeal to all short-term renters.
Make sure you understand the real estate market in Melbourne
Don't rush into buying the wrong property in Australia. Sit, relax and read our guide to avoid costly mistakes and make the best investment possible.