Top Picks For Property Investors

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Property experts eye the top suburbs for investors to target

WHAT will the next financial year hold for buyers?

Will strong demand continue to push property value growth, forcing buyers to consider their options amid a rising market?

WBP Property Group chief executive Greville Pabst said aggressive gentrification and rising values meant astute buyers needed to ask whether they would get more bang for their buck buying in some of Melbourne’s up-and-coming suburbs.

Mr Pabst suggested inner northwest suburbs could be top prospects for investors, especially Ascot Vale, Essendon and Brunswick.

“We see excellent opportunities for buyers considering Ascot Vale, thanks to its proximity to Melbourne’s CBD,” Mr Pabst said.

Two tram lines, a train line, access to freeways, parks and reserves and shopping meant Ascot Vale had ongoing potential, he said.

With similar entry points to Essendon, established apartments in Ascot Vale ranged from $400,000 to $450,000, while houses ranged between $750,000 and $800,000. Essendon also provided good return opportunities for investors, but Mr Pabst said upcoming supply of off-the-plan apartments, particularly along Keilor and Mt Alexander roads, could hold prices back.

Brunswick had a solid history of capital growth performance, particularly small houses, offering a great opportunity for investors, provided they selected well, Mr Pabst said.

Entry points to the suburb’s established apartments were from $300,000 to $350,000 for one-bedroom and around $550,000 for two-bedroom apartments, he said. Single-fronted, attached and freestanding houses were closer to $700,000 to $750,000, but were likely to fetch $850,000-plus in the long-term, he said.

“Brunswick has great investor opportunity provided you stick to some simple rules,” he said.

“You must be north of Brunswick Rd, south of Albion St and between Melville Rd and Lygon St.”

Experienced investors could look to West Footscray, which offered post-World War II weatherboards, earlier Californian bungalows and mid-century brick veneer homes. Close to Docklands and the CBD, it offered homes to young buyers and families with proximity to Western Hospital.

“West Footscray’s multicultural community has forged an impressive restaurant culture, making it a popular spot for younger homebuyers,” he said.

Entry prices for this area are $300,000 to $350,000 for established apartments and $650,000 to $700,000-plus for houses.

Mr Pabst said stable rental yields around 3 per cent within a 5km radius of the CBD meant purchasing a property slightly further out could make good investment sense.

But homebuyers faced with affordability issues should set their radar on emerging suburbs around Cranbourne, Hodges, Beaumaris, director Michael Cooney said.

“For young families, these emerging suburbs are a good place to enter the market,” Mr Cooney said. “With EastLink and other freeways going through these areas now, these suburbs have opened up as the daily commute becomes less of a pain. Though they aren’t million dollar suburbs, a young family or first-home buyers can look to these areas for affordable properties with a sizeable piece of land, with space for kids to play or a garage.”

Mr Cooney said investors could also consider bayside suburbs of Mordialloc, Chelsea and Cheltenham, where established infrastructure provided a safety net.

“It provides great potential for first-time investors who are looking for ‘the bayside lifestyle’ but have a smaller budget,” he said.

While looking at emerging suburbs is a strategy to get into the market, many people were still faced with buying in a rising market.

Frank Valentic, from Advantage Property Consulting, said other strategies to keep a lid on price included buying before auctions, hunting for off-market purchases or homes about to be listed and casting an eye to more affordable middle-ring suburbs.

“If you can avoid auctions at the moment, there’s a better opportunity of picking up a better price,” Mr Valentic said.

“If you get properties before they go on the internet, there might be an opportunity to make an offer and steal the property from the market where everybody knows about it and it gets five or six bidders on auction day.”

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Darren