Six Melbourne Unit Investment Hotspots - February 2024

By Rich Harvey, CEO & Founder, propertybuyer.com.au

Melbourne is a fantastic capital. A marriage of historic charm and pop culture cool with a CBD sitting on the banks of the Yarra, while suburbs enjoy a long expanse of Port Phillip coastline.

It’s one of the nation’s great cities, but there have been recent challenges for those looking to invest here, especially on the taxation and legislative front.

But, for just a moment, let’s look past these external factors and focus in on the property fundamentals – because that’s what astute long-term investors do.

I wanted to identify great locations for unit investment in Melbourne today, and what better way to do that than call on a local expert. Amanda Jones is our Propertybuyer professional in Victoria. She has insights about Melbourne’s real estate market that are second to none.

Amanda has a tick list of fundamentals that should be on all unit buyers wish lists, and she’s applied them to reveal six suburbs with exceptional potential when it comes to returns on a unit investment.

Caulfield

This well-loved southeast address is in a prime position, situated just 10 kilometres from the heart of the CBD and with excellent access to the city via trams and buses.

It’s a suburb that’s already full of old-world appeal with some fabulous homes, but there’s now a solid price push underway via gentrification. Younger buyers are loving how Caulfield is developing which often is a precursor to great capital gains.

With a median unit price of $747,000, Caulfield units are also reasonably affordable by major capital city standards too.

Elsternwick

Elsternwick is just 9.5 kilometres from the CBD and sits in the same pocket of potential growth as Caulfield. This is a gentrification story of the highest order. Cool cafes, retail outlets and other lifestyle options of appeal are making their mark, and increasing the demand for housing here.

Again, this area has affordability on its side with a median unit price of $625,000 making it a price-accessible option for attached housing buyers.

Best of all are the lifestyle attractions, particularly for families. Elsternwick has exceptional schools within its borders, including Wesley College, along with ready access to St Kilda and the ever-popular Elwood Beach waterfront.

Unit investors can expect rental yields of around four per cent, and rents have been growing at approximately 11.25 per cent per annum of late as well.

Brighton

Easily one of the most eye-catching waterfront locales in Melbourne’s orbit. Brighton sits on the Port Phillip shoreline 12 kilometres southeast of the CBD.

Real estate here is a bit pricier with the median for units being $1.092 million, but the fundamentals indicate there’s value growth to come in the medium to long term.

Here’s something else to factor in. Brighton is home to some of Melbourne wealthiest residents – and detached house here will set you back around $3 million on average. It’s this huge price disparity between units and houses that makes it so attractive as an investment option. Units have plenty of potential to be dragged up by the house median.

Of course, the area is extremely well serviced with three railway stations in proximity as well as an enviable cafe strip along Church Street. Some of Melbourne’s most appealing schools are on hand as well.

With current rental growth sitting around 8.5 per cent per year, investors are enjoying stellar returns.

Mordialloc

Mordialloc is indigenous for “Muddy Creek”, but this suburb’s prospects are far from brackish when it comes to unit investment.

Mordialloc is a lifestyle mecca with a main street full of cafes and up market restaurants. There’s also the waterfront appeal of beaches, as well as boat access to the bay via Mordialloc Creek. The demographic is changing too with 35-to-40-year-old buyers flocking here to buy a home.

While positioned 24 kilometres from the city – a bit further out than some of our other picks – it’s easy to commute by train, car or bus to the heart of Melbourne.

And its family-buyer credentials are unquestioned. There are exceptional primary school and childcare options… and as every good property expert knows, a growing family demographic is a sure sign of great long-term value increases.

The median unit price $697,500 is also very affordable by Melbourne standards.

Parkdale

This highly regarded beachside suburbs is full of great fundamentals. There are wonderful cafés and restaurant along Como Parade, and exceptional schooling options are on hand including Mentone Grammar.

It’s appeal to families has manifested in the demographic which have moved markedly toward the 35-to-45 age bracket.

The suburb sits around 22 kilometres from the Melbourne CBD, and Parkdale Train station is an easy option for commuters.

Unit buyers are facing a $715,000 median price here with a median rental yield of around 3.9 to 4.0 per cent. Best of all for cashflow, rents have been growing at approximately 10 per cent per year.

Bentleigh

Bentleigh is already a highly regarded address among astute buyers, but many may not have had unit investment on their radar.

Bentleigh is central to all facilities with great transport options such as Bentleigh Station for rail, and a tram nearby in Brighton East.

There are also excellent schools here plus retail and cafés, particularly along Centre Road. Chadstone and Southland shopping centres are within proximity too.

The median house price is $1.66 million but the median unit price is just $763,000. This wide disparity means there’s plenty of room for unit prices to increase – particular as older residents move on and a younger family demographic becomes firmly established. This changing of the guard bodes well for all Bentleigh property owners seeking capital gains.

The right kind of unit in a well-chosen Melbourne suburb has the potential to yield excellent financial outcomes for investors, but key to the equation is selecting the best possible asset. To reduce the risk of investing in an underperforming unit, arrange for a local expert to look after your interests. Amanda and her team at Propertybuyer are your ace in the hole when it comes to acquiring the right kind of Melbourne real estate for your needs.

  To have one of the friendly Propertybuyer Buyers' Agents  to contact you:

   or

call us on 1300 655 615 today.