Presented by Oliver Hume
First published 30 Aug 2023, 10:03am
Are you thinking of buying property in Melbourne? If you're living interstate, it pays to know where and what to consider buying, as well as how.
Melbourne is forecast to become the largest city in Australia by 2031. Picture: Getty
There are several benefits to searching for property across state lines, including diversifying your portfolio, greater exposure to growth opportunities and the chance to access property with a much lower capital cost.
Melbourne currently presents a ripe opportunity for investment, with a stable economy, a rapidly swelling population, numerous high-growth areas and a broad range of property types and price points.
The relative affordability of property in Melbourne, particularly for buyers from Sydney, is one of the reasons it has become so popular with interstate buyers.
George Bougias, National Head of Research at Oliver Hume, says it's wise to take a long-term view and understand some of the fundamental drivers of the Melbourne property market.
One of the most important drivers is Melbourne’s rapid population growth.
Melbourne is forecast to overtake Sydney within a decade, making it Australia’s largest capital city by around 2031.
Bougias points to the city's robust, diverse and resilient economy, high quality of life, infrastructure investment, cultural attractions and educational institutions as just some of its appeal to residents and investors alike.
Its key investment fundamentals and historical performance – including a record of capital growth and solid rental returns – continue to prove attractive to investors.
"Melbourne has traditionally experienced steady capital growth and this is expected to continue over the next few years as demand for property exceeds supply," Bougias says.
"Melbourne's rental market remains very tight due to a growing housing shortage.”
Melbourne greenfields developments, such as Berwick Waters in the south east, offer good value and growth prospects.
When deciding exactly where to put your money, it is important to look at current and future growth trends and take a medium to long-term perspective.
Bougias says Melbourne’s rapid population growth and dynamic economy are key drivers (and appeal) of the city’s real estate market.
"Melbourne's west is one of Australia’s fastest growing regions," Bougias says.
"The area is receiving infrastructure investment and has excellent access to major employment centres and transport hubs – for example, ports and airports.
"Melbourne’s western growth corridor is also the gateway to Geelong and Ballarat (Victoria's largest regional cities and also experiencing high rates of growth)."
Melbourne's north is also undergoing substantial transformation, with a widening socio-economic mix and a diversifying economy, he says.
The region plays an international and interstate gateway role in terms of the Melbourne Airport, Hume Freeway and the Melbourne-Sydney-Brisbane rail line.
Tarneit in Melbourne's west is one of the city’s fastest growing suburbs, with communities such as Unity Park emerging to meet demand.
Bougias says Melbourne's south east is one of Australia's largest regions in terms of economy and population, which continues to attract considerable infrastructure investment and is the gateway to Victoria's Gippsland region.
He adds that greenfield developments in these growth corridors present strong investment prospects for interstate buyers as they are experiencing population growth.
"Population growth and buyer demand in these markets continues to increase and is underpinned by a range of factors including affordability, value for money and the opportunity to purchase a new home," he says.
Melbourne offers a diverse range of residential property types and price points, from detached homes to new house and land packages, residential land, townhouses and other medium-density developments.
The city is also seeing increasing demand for homes in lifestyle living communities for over-55s.
Bougias says greenfield developments have always been popular in Melbourne, as buyers can buy new while choosing from a range of property types and sizes to suit their needs.
"Melbourne's greenfields offer a tremendous range of opportunities for buyers including both house and land and townhouses," he says.
Newport Village offers townhomes in the inner west, just 7km from Melbourne’s CBD, with connectivity to transport and the coast.
"Given Australia’s affordability challenges, buyers in Melbourne's greenfields have a better chance of buying a property with land than if they were buying in inner or middle Melbourne."
But he adds, it's not a "one-size-fits-all" situation. The type of property you can buy comes down to factors including your budget, living circumstances (if you intend to move) and investment strategy.
Melbourne offers a wealth of advantages to interstate purchasers and investors, but it's essential to begin with your own research.
Bougias says markets across Australia’s states and territories differ and have their own unique drivers, characteristics, policies and legal frameworks.
Victoria is no different.
Depending on whether you're investing in Melbourne or regional Victoria (or intend to become an owner-occupier) it is best to start the journey by doing your own research.
The median price for dwellings in Melbourne was $805,000 in July 2023 – 23.05% lower than Sydney. Picture: Getty
Living outside Victoria? In many cases, it's beneficial to consult with a team of professionals who can help you better understand the local market and assist you in your property purchase journey.
This includes local real estate agents, solicitors/conveyancers and, if you plan to rent out your investment, you can also speak to property managers.
You could reach out to agents and property services firms that specialise in certain property types.
If you're interested in purchasing in a new development, Bougias says the Oliver Hume team can assist, as the company works with a number of local developers and specialises in the delivery of new residential properties.
The upcoming Melbourne Property & Land Expo by Oliver Hume will showcase everything you need to know – including uncovering the city's biggest growth opportunities.
Entry to the expo is free and will feature 14 different projects in Melbourne and surrounds with incredible savings on offer by participating developers, including Frasers Property Group, ID Land, Villawood Properties, Land Real, Mondous Property Group, HB Land and Lotus Living.
Don't miss out: visit the event page to register your attendance.
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Oliver Hume brings more than 70 years of industry experience working with developers, builders and industry consultants to plan and deliver master-planned subdivisions and built-form projects. With a national research team analysing history, demographics and emerging market trends, the team at Oliver Hume provides stakeholders and purchasers with the knowledge and insight to make the best property investment decisions.
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