The best and worst suburbs in Melbourne to invest in
If you’re trying to find a property with solid growth and yield prospects, we've found where investors should and should not be spending their time and money investing into.
A slightly more affordable alternative to Sydney, Melbourne offers investors some good returns, but knowing where to invest is always key. For Andrew Date, principal at Industry Insider, the best areas to look into are with 20 to 25 kilometres of Melbourne, in the inner north and the inner west.
“You'll be looking at suburbs like Glenroy, Pascoe Vale and Broadmeadows, 100 per cent, you can get into those pockets for $800,000,” Mr Date said to Smart Property Investment.
“I see the inner north of Melbourne as like the west of Sydney over the last property boom Sydney, where the houses were going up 20, 30 per cent over a 12, 18-month period.
“That's not going to happen in this cycle, in the next cycle it will, but it's going to take a while because we've just come out of such a strong period of growth and we're in a steady decline at the moment.”
In terms of where not to look for, Mr Date cautioned against suburbs that have large plots of land that can be developed due to there being lack of a “scarcity value”.
“So, avoid suburbs that have large development, lot develops going on, so Clyde and Cranbourne, some of those areas have got 300, 400 lots still to be chopped up and sold off,” he said.
“You don't have any scarcity value and if someone has to get out of that estate at a loss, that really affects the value of your property, and you don't have any point of difference, which is unfortunate.”
Looking at apartments in particular, Mr Date also said that banks have various developments flagged and will not lend against, located in Southbank and Docklands, so investors should spend their time elsewhere.
“I know that for a fact that the banks have red flags against certain developments in certain areas, and Southbank would be one of those areas in some of those developments,” he said.
“Docklands also, there are certain developments in Docklands that the banks are very much opposed to lending against due to the amount of the funds they already have tied up in the development with the developer and also some of the sizes of those apartments as well.”
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