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Melbourne’s best suburbs to buy in for investors and owner-occupiers.

22 December, 2021 / Category: Blog

Melbourne’s best suburbs to buy in for investors and owner-occupiers. banner image

During 2021 Melbourne’s housing market achieved over 13% growth, however, there are markets within markets and some suburbs recorded significantly higher growth. This is despite a significant loss in population to regional and interstate areas and the temporary end to international migration. Melbourne’s property market growth continues to be underpinned by people wanting to grow their property portfolio or upgrade their homes. Buyers are particularly attracted to areas that can provide good access to jobs, connectivity and lifestyle.

We expect the Melbourne market to continue to grow, albeit at a slightly slower pace in 2022. All our major banks are forecasting growth of between 5% and 8% driven by the return of international migration and the reduction in supply coming online over the next 12 to 18 months (due to a decline in project commencements during the pandemic).

So, if you’re looking to invest, upgrade your home or move to a more family-friendly area, now is the time to be decisive so that you can maximise your capital growth in the short and long term.

What are the best suburbs to invest in?

We are continuing to see blue-chip areas deliver strong growth in recent months despite other parts of the Melbourne market cooling slightly. Our investment approach focuses on areas that have shown consistent historical growth with desirable amenities and demographics to nurture future growth successfully. Our preferred (and recommended) areas for investment properties in Melbourne include deep Bayside, the Mornington Peninsula, and inner west Melbourne. We also look at the whole Victorian market to select suburbs that have strong yield  not commonly found amongst the higher priced blue-chip suburbs.

Deep Bayside suburbs such as Beaumaris, Bonbeach and Mordialloc are all showing strong yields and high demand for rental properties with both houses and units often leasing in less than a week. Given these areas close proximity to some of Melbourne’s most sought after blue-chip suburbs, as well as beach access and good amenities, we see these areas as having strong future capital growth potential.

The Mornington Peninsula, traditionally seen as having limited capital growth compared to some of Melbourne’s suburbs closer to the city, has boomed over the last two years. The market has grown by close to 30% in the last 12-months and features some of Melbourne’s best performing suburbs. Red Hill South is leading the way with 26.7% growth, closely followed by St Andrews Beach, Red Hill, Shoreham and Flinders which were all above 20% growth in 2021. With entry-level prices starting from approximately $600,000 and summer rental prices soaring, these areas could provide a strong investment opportunity if bought at the right time in the right area.

Melbourne’s inner west has pockets that provide outstanding amenities and unrivalled access to the CBD, all for a very competitive price not found in similar suburbs in the CBDs north or south-east. Suburbs such as Spotswood, Newport and Yarraville have demonstrated consistent year on year capital growth. High demand from young professional renters underpins strong yields on most investments in these areas.

We are firm believers that if you buy the right investment property in a prime location, you are likely to be able to supercharge your investment returns in the short and long term. 

What are Melbourne’s best suburbs to live in?

Wouldnt it be nice to work, live and play all within 20-minutes from home? These factors have become the new gold standard for a desirable lifestylepost-Covid. 

Everyone has different lifestyle requirements—so we always recommend choosing an area you love, with the features and amenities that matter to you and your household—but are also within your budget. 

 Best suburbs for families

There are lots to consider when choosing a home for your family (or future family)! You want a home thats central to local schools, parks, the beach, shops and of course, extended family and friends. Plus, youll also want a friendly neighbourhood and accommodating community.

Thankfully, Melbourne has many suburbs which cater for a family-focused lifestyle. Of all the considerations for families, schools tend to be the most important. Whether you have a family or are considering one, we always recommend considering school zones when buying a new home. According to the Domian.com.au 2021 School Zone report, roughly one-in-ten school zones had 10-20% additional house price growth over the broader suburb’s growth. A decision around which school isn’t just about your children, but also your properties future capital growth.

Our team understands the growing familys needs and is across all the desirable aspects for finding a home. Our preferred family-friendly areas include the bayside suburbs of Brighton, Brighton East, Bentleigh East and Elsternwick. As well as the south-eastern suburbs of Armadale, Glen Iris and Malvern. All of these suburbs offer outstanding school choices, as well as prime lifestyle elements such as parks, beaches, cafes and retail amenities.

Melbourne’s best suburbs for lifestyle.

When considering a lifestyle area, you can’t go past inner bayside or the inner south-east. St Kilda West was recently named by Realestate.com.au as Melbournes most lifestyle-friendly suburb—with the beach at your doorstep and only a short commute to the CBD, its no surprise people flock here. 

Those looking to be in the heart of Melbourne’s shopping, dining and entertainment precinct, the inner south-eastern suburbs of South Yarra, Prahran, and Windsor offer a lively, easy-going neighbourhood, ideal for young singles and couples. The area is well connected with trams and trains into the CBD. Consistent strong capital growth in these areas means they’re not just a lifestyle choice but also a sound investment choice.

Those seeking sun, beach and a laid back vibe will find their tribe in the inner bayside suburbs such as Albert Park, Elwood, Port Melbourne and St Kilda. With the beach at your doorstep, an active social scene from day to night and convenient access to the city, it’s easy to understand why it is the ideal location for young singles and couples and young families. With a median house price ranging from $1.3m to $2.2m and a variety of housing including period homes, apartments and modern townhomes, there is something to suit most budgets.

For some, the choice to move for lifestyle might be more than a trip to the next suburb. A sea or tree change to regional Victoria or the Mornington Peninsula has become increasingly attractive to Melbournites. These areas have always offered an exceptional lifestyle choice for all ages and stages of life, however, with the increase in flexible work throughout the pandemic, there has been an influx of residents to these areas from Melbourne. They now offer an attractive laid back lifestyle, plus strong capital growth. Some areas have seen exceptional capital growth with areas such as Red Hill South demonstrating growth above 20% this year.

Not sure where to start?

Get in touch with the Infolio team for a free 30-minute discovery call.



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