Investing in Melbourne Real Estate: Opportunities and Challenges

Investing in Melbourne real estate is, for many, the dream. As Australia’s largest city (having overtaken Sydney in 2023), there are plenty of reasons to want to invest in Melbourne.

This cultural and economic capital is one of the cities of the world. In a growing country like Australia, there is always going to be demand for residential and commercial properties in a major city like Melbourne.

So, let’s discuss what you need to know about investing in Melbourne, as Patrick Leo, Australia’s leading property specialist, outlines the opportunities and challenges for investors in Melbourne.

Opportunities

Though investing in Melbourne seems like it may have become more difficult, experts will tell you that there are still some golden opportunities to be taken advantage of in the city:

• Growing city with forecast for increased prices
  Melbourne had the largest population increase between the 2022-2023 financial year, and the second-highest growth rate, behind Perth, at 3.3%. Experts are also forecasting a surge in property prices, with a particularly strong performance by units, within the next 5 years. You can read more about this forecast, outlined by Oxford Economics Australia, in our article here.

• Great suburbs for growth
  Within Melbourne, there are some particularly promising suburbs for growth, which have proven themselves as worthy of particular attention. Areas like Croydon South, Officer and Pakenham are all tipped to boom in the next few years, thanks to affordable homes and good connections to transport and freeways. Be sure to check out our detailed overview of Melbourne’s most promising suburbs.

• Low vacancy rate
  Melbourne is experiencing an historically low vacancy rate right now, at just 1.5%. For reference, a typically competitive price rate is between 2% and 2.5%. This means there’s a huge demand for Melbourne rentals, with very little supply.

Challenges

In any property market, there comes a set of unique and common challenges. Melbourne’s challenges are:

• High property costs
  Melbourne’s median house price is sitting at $1.04 million, making it increasingly difficult for beginner investors to get a foothold in the market. With smart finance options however, which we cover here, you may find that there are still plenty of properties within your reach. We always suggest a slow-and-steady approach to investment strategising, and we’ve created a guide to help beginner investors on their journey.

Whatever your goals and ambitions are in the investing world, Patrick Leo can help you fulfil them. We’re Australia’s top team of property advisers, and it’s our job to learn about your investing dreams and make them come true. We find quality investment properties for our clients and help manage them, making it easier than ever to be a landlord. Get in touch with Patrick Leo and start your journey to property investment today.