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10 most affordable suburbs in Melbourne for property investment in 2021 | OpenAgent

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Some of the most affordable suburbs Melbourne has to offer in 2021 hold great opportunities for property investment. Pick the right postcode and you stand to benefit from accessible entry prices, rapid growth rates and consistent rental returns!

In terms of criteria, the affordability we are seeking here is any suburb with a price less than $740,562 or thereabouts - Melbourne’s current median dwelling price. 

From student hot-spots to family-friendly nooks, if you’re trying to figure out where to invest in Melbourne in 2021 we have you covered with our list.

1. Officer, Melbourne

Where property investors can nab a house for around $600k

  • Median house: $603,750
  • Median unit: $470,000

Officer, in Melbourne’s south-east, has a lot going for it, not least affordable median house price in the $600k range and $470,000 for units. Throw in great access to public transport, in the form of local train station and the Princes Freeway and you can see why investors have the suburb on their radar. There is also a decent selection of schools as well as other essential amenities like restaurants, shopping centres and a hospital - which makes it popular with families.

In terms of rentals, houses currently rent out for $400 per week, with an annual rental yield of 3.4per cent, while units rent for $370 per week with a rental yield of 4.2 per cent. Officer has recorded a compound growth rate of +13.2 per cent for houses and +4.9 per cent for units over the last five years.

2. Melton

A market ripe for property investments in Melbourne

  • Median house: $410,000
  • Median unit: $335,000

If affordability is your number one priority then Melton, 35 kilometres from the city should be on your radar. With median property prices of $410,000 (houses) and $335,000 (units) this is some of the cheapest property that can be had in metro Melbourne. The suburb has its own railway station, is close to the airport and has decent schools.

Melton property has posted a growth rate of +10.0 per cent for houses and +7.6 per cent for units over the last five years. In terms of rentals, you can expect to receive $320 per week for a house with an annual rental yield of 4.1 per cent, while units rent for $300 per week with a rental yield of +4.7 per cent.

Read more: Guide to buying a house and land package

3. Tarneit

A burgeoning Melbourne suburb in the outer-west

  • Median house: $580,000
  • Median unit: $455,000

Moving to Melbourne's outer west and you find ‘new’ suburbs with contemporary homes and generous block sizes where housing estates dominate. Tarneit, like neighbouring Hoopers Crossing, is close to Werribee and all it has to offer, with the Bay and easy enough access to the CBD. 

Median property prices range from $580,000 for houses to $455,000 for units, with houses renting for $380 per week, while units rent for $345 per week. Price growth over the past five years has been healthy, with houses up +7.2 per cent and units +7.6%.

4. Hoppers Crossing

The suburb that’s close to everything

  • Median house: $565,000
  • Median unit: $410,000

Like Tarneit, Hoppers Crossing has a lot going for it - especially for families and established mature couples who don’t need to be right on the doorstep of the CBD. If you do need to access the city lights it is just 23 km to the city. Currently, the median price for a house is $565,000, while the median price for a unit is $410,000.

From an investment property perspective, houses in the suburb rent for $350 per week, with units returning $315 per week. Like neighbouring suburbs compound growth has been respectable over five years, houses advancing +7.8 per cent and units +6.4 per cenT.

Read more: Do school catchment areas affect local property prices?

5. Investing in Craigieburn

Melbourne’s family-friendly suburb in the city’s outer north

  • Median house: $580,000
  • Median unit: $405,000

Craigieburn in Melbourne outer-north was once the country, but times have changed - though you can still count on affordable property in this rapidly developing area. Housing developments dominate, with lots of green space and sporting facilities to complement the laid-back vibe. Units are currently at a median price of $405,000 and renting for $349 per week, while houses are at a median price of $580,000 and renting for $400.

You can expect an annual rental yield of 3.6 per cent from houses, while units will yield in the region of +4.5 per cent. Growth rates over five years have been steady here, with houses up +8.0% and units +3.1%.

6. Pakenham, Melbourne

Where property investors can buy a house for ~$550k

  • Median house: $565,000
  • Median unit: $405,000

Pakenham, some 58km south-east of the CBD is very much about families, with planned estates and an outdoor vibe. In terms of lifestyle attractions, it has it all - from local primary and high schools to sporting facilities and shopping centres - with the Dandenong Ranges and Yarra Valley right on your doorstep. 

Median property prices range from $565,000 for houses which rent for $370 per week to $405,000 for units which rent for $340 per week. The annual rental yield for houses is +3.4 per cent, while units yield +4.4 per cent. Pakenham has recorded a compound growth rate of +8.3 per cent for houses and +7.0 per cent for units over the last five years.

Read more: Cheapest suburbs to buy in Melbourne

7. Werribee

Where investors can get a house for under $550k

  • Median house: $540,000
  • Median unit: $400,000

Werribee, situated between Geelong and Melbourne has a lot going for it from a lifestyle perspective - with river frontage, a zoo, winery, beautiful parklands, a major shopping centre, and the beach. There is also an express train to the CBD, which makes it popular with families and professionals alike.

Surprisingly median property prices are still under $600k here, with houses at $540,000 and units at $400,000. In terms of rentals, houses in Werribee rent out for $350 per week, with an annual rental yield of +3.4 per cent. You can expect in the region of $315 per week from a unit here, with a rental yield of +4.1 per cent. Compound growth rates in Werribee are a healthy +9.7 per cent for houses and +6.6 per cent for units.

Read more: Top 10 places around Australia to invest in an apartment

8. Investing in Dallas, Melbourne

Affordable investment properties under $500k

  • Median house: $488,000
  • Median unit: $421,000

As we have seen, if you want real value in Melbourne then head north. Dallas has a median house price of $488,000, while units fetch an average of $421,000. Besides being close to the airport, as well as Coolaroo and Upfield train stations, there is good access to the CBD 18km away via the Hume Highway - making it popular with young people, families and retirees.

In terms of returns on rentals, houses in Dallas rent out for $348 per week with an annual rental yield of +3.7 per cent and units rent for $310 per week with a rental yield of +3.8 per cent. Growth rates are also healthy, with houses up +8.5 per cent over five years, while units advanced + 8.3 per cent over the same timeframe.

Read more: Where you can score real estate bargains in Australia

9. Croydon, Melbourne

Leafy lifestyle for families and students

  • Median house: $825,000
  • Median unit: $620,000

Croydon, in the eastern suburbs of Melbourne is all about a leafy, laidback lifestyle with good schools and the stunning Dandenong Ranges as a backdrop. The suburb is popular with families and students - and there’s still good value to be found despite it falling just outside our median limit.

Houses are just over the city's median dwelling price at $825,000, with apartments at a median of $620,000. If you are looking for an investment property, houses rent out for $450 per week with an annual rental yield of +2.8 per cent, while you can expect to receive $400 per week from a unit, with a rental yield of +3.4 per cent. The compound growth rate for houses in Croydon is +4.9 per cent for houses and a healthy +5.7 per cent for units.

10. Carlton

Snap up an affordable Melbourne apartment

  • Median unit: $487,500

Green and leafy Carlton, with its close proximity to the CBD and educational institutions make the suburb the perfect location to invest in an apartment. Besides the area's rich Italian heritage, you have bustling Lygon Street and nearby Brunswick Street, which are strong lifestyle drawcards. Other obvious attractions are the suburb's walkability and access to public transport.

The median price for a unit in Carlton is $487,500, with a one bedroom unit median at $215,000 and a two bedroom median at $605,000. The real attraction is the consistent and generous rental yield of +3.7 per cent.