It’s no secret that Melbourne’s housing market had a great year in 2021, with the overall market witnessing a 18.6% gain throughout last year alone. Soaring valuations and a sea of eager buyers saw Melbourne’s median house price rise to a cool $1.1 million, despite the city weathering 6 different lockdowns.
While the Melbourne market didn’t reach the levels set by record housing prices in Sydney, Melbourne still has plenty to offer investors that are looking for high growth in 2022. Experts and analysts say that with the return of both domestic and international immigration, Melbourne is set to experience even higher growth than Sydney this year, especially now that lockdowns are finally a thing of the past.
According to Metropole Properties’ Property Development Specialist, Bryce Yardney – the more affluent suburbs of Melbourne, where the median income is higher, will be where property prices grow the most in the long term.
So, which Melbourne suburbs are the best choice for investors or new home buyers? This comprehensive list will go through all of Melbourne’s best suburbs that have been tipped to experience the highest growth in price throughout the rest of this year (in no particular order).
According to Terry Ryder, the Managing Director of Hotspotting, the suburb of Ashwood which is located just 15 kilometers from Melbourne’s CBD is a brilliant growth opportunity. While the median house price is relatively high at $1.365 million, Ashwood is experiencing rising buyer demand and the rate of price growth has accelerated rapidly over the past year. Ashwood is also situated right near a diverse range of medical and university facilities that make the suburb a compelling investment opportunity — including the $1 billion Victorian Heart Hospital which is set to be opened later this year.
Ryder continues to say that Templestowe, which is less than 20km from Melbourne’s CBD is another fantastic opportunity. Despite the suburb having a fairly high median house price of $1.5 million, the first few months of this year have already witnessed elevated buyer demand, alongside lower than average vacancies, causing substantial growth in rental prices. Adding to its livability factor, Templestowe is surrounded by parks, wetlands and golf courses.
3. Heidelberg Heights
The suburb of Heidelberg Heights is a standout opportunity for new investors, says Ryder. With a more affordable median price of $865,000 houses in Heidelberg Heights have solid rental demand and are witnessing a growth in overall sales, alongside a solid uptick in the rate of price growth. The suburb is situated right next to the La Trobe University campus and is located just 16km from the CBD.
Property expert, Bryce Yardney thinks that Bentleigh is one of Melbourne’s most underrated investment opportunities. The nearby suburb of Bentleigh East is already a very high-demand market with great public transport, local schools, and plenty of amenities on offer, which is making Bentleigh a hub for the construction of new townhouses.
Yardney believes that the increasingly gentrified suburb of Caulfield is a no-brainer for property investors interested in the Melbourne market. Situated just 10 kilometers from the CBD and having one of the most well-serviced public transport systems in Melbourne, the suburb is primed for growth in 2022 as its aging population continues to hold onto properties, driving up surrounding prices.
The almost-coastal suburb of Ormond has a high density of owner-occupier properties, flexing an overall rate of 59%. Because the suburb’s owner-occupation demographic is divided evenly among families and single people, Ormond is set for consistent growth over the coming years, Yardney says. He continues to add that Ormond is in the midst of solid gentrification with a wealth of cafes, shops, supermarkets all situated close by as well as offering great public transport and superb schooling for families.
What type of property should you invest in?
Buying a house in Melbourne is definitely the preferred choice of investment, as apartments in the current market just aren’t delivering the same long-term return. Owing to the length and consistency of lockdowns during the pandemic, a lot of people left Melbourne, leaving a pretty high vacancy rate for apartments in their wake.
How much will Melbourne house prices grow in 2022?
An article on the best Melbourne suburbs to invest in wouldn’t be complete without an overall market prediction thrown in.
QBE expects that house prices in Melbourne will increase by over 11% in 2022 as immigration and the reopening of borders work to raise GDP and median income.
Westpac bank is slightly more conservative in its forecast, projecting a growth of roughly 8% across all suburbs in Melbourne throughout the remainder of this year.
DISCLAIMER: Not all properties in the aforementioned suburbs will make great investment properties as certain locations and neighbourhoods are subject to random conditions that can cause significant differences in long-term performance.