With one of the most competitive property markets among Australia’s capitals, Melbourne has historically fostered a favourable environment for property investment — and 2024 is set to be a year of opportunities for strategic investors.
Melbourne property values in 2023 showed slow growth; with average house prices rising by 3% over the year and average unit prices by 2.5%. With prices still below their previous high in March 2022, there is a high growth potential for the rest of 2024.
With rising demand in Melbourne’s housing market supporting growth expectations, many investors are looking to stake their claim on the market and reap the rewards. Here are our picks for the 8 best Melbourne suburbs for investment in 2024.
1. Flemington
Just four kilometres from Melbourne’s CBD, Flemington offers incredible value for investment with house prices that are now just breaking the million mark. On top of its proximity to the city centre, it offers great connectivity with a network of public transport links as well as a range of conveniences and amenities that make it such a popular choice among investors and tenants alike.
Population: 9,065
Number of private dwellings: 5,167
Median house price: $1,095,000 (+3.6% on May 2023)
Median house rental price: $650 per week
Average house rental yield: 3.5%
Median unit price: $385,000 (-9.5% on May 2023)
Median unit rental price: $435 per week
Average unit rental yield: 5.8%
2. Elsternwick
One of Melbourne’s most sought after suburbs, Elsternwick sits nine kilometres away from the city centre. It’s an ideal location for young families and professionals, offering quality options for schools, shopping centres, and even a nearby beach for recreational activities. Current dips in property prices present an opportunity for investors who are looking for a way into the lucrative value that Elsternwick can deliver.
Population: 10,887
Number of private dwellings: 5,250
Median house price: $2,015,000 (-10.0% on May 2023)
Median house rental price: $885 per week
Average house rental yield: 2.8%
Median unit price: $615,000 (-9.2% on May 2023)
Median unit rental price: $540 per week
Average unit rental yield: 4.7%
3. Brighton
Brighton is a bayside suburb 11 kilometres away from the CBD, with a reputation for hosting some of Melbourne’s wealthiest residents. This is reflected in its high house prices of over $3 million, which may turn away investors with a more modest budget. That being said, the value of potential returns far outweighs the upfront cost of investment, especially since the suburb offers a whopping three railway stations, a vibrant strip of shopping and dining options, and some of the best schools available.
Population: 23,252
Number of private dwellings: 10,536
Median house price: $3,152,000 (-2.0% on May 2023)
Median house rental price: $1,350 per week
Average house rental yield: 2.6%
Median unit price: $1,195,000 (-5.8% on May 2023)
Median unit rental price: $675 per week
Average unit rental yield: 3.8%
4.Narre Warren South
Narre Warren South is located in Melbourne’s outer southeast area, but still retains convenient access to the city via a range of transport options. The suburb has seen rapid growth in recent years with the addition of major retail centres and recreational facilities in the neighbourhood, and is now highly favoured among families for its convenience and relatively affordable housing options.
Population: 30,909
Number of private dwellings: 9,229
Median house price: $835,000 (+3.7% on May 2023)
Median house rental price: $550 per week
Average house rental yield: 3.8%
5. Moonee Ponds
Moonee Ponds is an inner-city suburb located six kilometres from the CBD, boasting a mix of heritage and modern housing options for professionals that form the majority of the market. Its attractiveness as a location is further bolstered by its offering of vibrant lifestyle and recreational facilities from cafes to the Maribyrnong River.
Population: 16,224
Number of private dwellings: 8,081
Median house price: $1,500,500 (-2.6% on May 2023)
Median house rental price: $700 per week
Average house rental yield: 2.8%
Median unit price: $540,000 (-5.0% on May 2023)
Median unit rental price: $500 per week
Average unit rental yield: 5.6%
6. Cheltenham
Rapidly-gentrifying Cheltenham is a popular choice among investors looking for good value in terms of amenities. The suburb offers all the expected conveniences of city living alongside easy access to the CBD via the express train at 19 minutes. Some other highlights of Cheltenham include stunning golf courses and close proximity to the beach.
Population: 23,992
Number of private dwellings: 10,468
Median house price: $1,215,000 (+3.1% on May 2023)
Median house rental price: $695 per week
Average house rental yield: 3.2%
Median unit price: $677,500 (+10.2% on May 2023)
Median unit rental price: $500 per week
Average unit rental yield: 4.5%
7. Parkdale
Parkdale is sandwiched between its own local beach and the bustling side of the Nepean Highway offering the best of both worlds for residents and families in the area. The urban side of Parkdale features a whole host of amenities including several top schools, great kindergartens, multiple parks and reserves for recreation, and more. Coupled with relatively affordable house prices that are showing consistent growth, Parkdale is ripe with opportunity for investment.
Population: 12,308
Number of private dwellings: 5,195
Median house price: $1,480,000 (+9.0% on May 2023)
Median house rental price: $750 per week
Average house rental yield: 2.8%
Median unit price: $760,000 (+9.7% on May 2023)
Median unit rental price: $500 per week
Average unit rental yield: 4.0%
8. Burnside Heights
8. Burnside HeightsThe staggeringly low house prices in Burnside Heights makes it a hidden gem on this list, especially for investors looking for a prudent investment opportunity. With a rapidly growing population and rising development of essential amenities, Burnside Heights offers increasing residential appeal for families and young couples.
Population: 6,377
Number of private dwellings: 1,808
Median house price: $741,500 (-1.2% on May 2023)
Median house rental price: $520 per week
Average house rental yield: 3.8%
Note: The above data insights are courtesy of the 2021 Australian Bureau of Statistics (ABS) Census data and Real Estate.com.au.
