Our Pick Of Suburbs To Invest In Melbourne In 2021

Despite Melbourne’s property market being impacted more than any other Australian city during the extended COVID-19 lockdown in 2020, it has rebounded strongly in the first quarter of 2021. As reported by Domain, over the March quarter house prices lifted by 7.3% while unit prices have grown by 2.2%. It is forecast that the city will see up to 12% capital growth over the next 12 months.

If you’re looking to invest, here are 10 suburbs to watch in Melbourne.

Glen Waverley

The residential suburb of Glen Waverley continues to be a popular investment suburb thanks to its strong education opportunities. Glen Waverley Secondary College is regarded one of the best public schools in Victoria, boosting demand among families. Median property prices range from $1,326,000 for houses to $948,000 for units, with an annual rental yield of 2% and 2.5% respectively.

Elsternwick

Located just 9km from the CBD, Elsternwick continues to be a sought-after suburb, particularly among families. Elsternwick has seen 17.8% annual change on house prices, with a median house price of just under $2 million and median unit price of $705,000. Units are reflecting a strong rental yield at 3.2%, while houses are posting a 1.85% return.

Brunswick East

Defying gloomy predictions, Brunswick East has proven a solid growth area in the Melbourne city. Median house prices have climbed by 23.3% year on year, fetching $1,174,250. Investors can expect an average rental yield of 2.5% for houses and 4.2% for units.

West Footscray

Regarded as one of the fasted gentrifying suburbs in Melbourne, West Footscray is proving a popular suburb for first-time investors, offer bigger blocks at a lower price point. This inner-city pocket is a hive of activity with trendy coffee shops, cafes and bars. The median house price sits at $867,500, while units can be snatched up for $560,000, representing a 2.8% and 3.2% rental yield respectively.

Geelong

Geelong is one of Australia’s fastest-growing regional communities, offering a coveted lifestyle just one hours’ drive from Melbourne. It’s the gateway to the Great Ocean Road and well connected via public transport. Geelong has experienced an incredible 22.9% capital gain over the last 12 months, with the median house price sitting at $893,000, which translates to one of Victoria’s best performing suburbs.

Mordialloc

The lifestyle-centric suburb of Mordialloc is popular among young families with great schools, direct access to the beach and vibrant cafes. While capital gains have been lower than other suburbs, Mordialloc shows strong rental yield at 2.9% for houses and 3.6% for units. Investors can nab a unit for a median price of $627,500, while houses will cost upwards of $1 million.

Mornington Peninsula

The Mornington Peninsula, an hour southeast of Melbourne, has proven to be the city’s most vibrant market, led by COVID-19’s work-from-home trend and the rise in lifestyle living. It offers an idyllic coastal location at affordable prices with a strong record of growth and low vacancies. Property prices range from roughly $500,000 to $1.5 million. Red Hill South saw a 26.7% increase in the median house value year on year, with St Andrews Beach, Red Hill, Shoreham and Flinders all posting more than 20%.

Box Hill

Box Hill has proven to be one of the best-performing suburbs within the Australian property market over the past year. Located 14km east of the CBD, it’s well connected in terms of education and health facilities and offers fantastic parks and recreation. Units are representing strong value for money with a median price of $560,000, and annual rental yield of 3.7%.

Bentleigh East

Bentleigh East saw significant growth post lockdown with consistent demand for the suburb’s public schools, parkland and local shopping strips. The median house price now sits at $1,235,000, with a rental yield of 2.3%. Units have seen a 15.6% price increase in the last year, with a 3% return.

Thornbury

Just 7km from the CBD, the inner northern suburb of Thornbury is set to boom. It is experiencing strong population growth attracting professionals and young families priced out of neighbouring Northcote. The suburb experienced a price growth of 10% alone in the last quarter of 2020, with median house prices sitting at $1,250,000.