According to the Australian Bureau of Statistics, average house prices in Melbourne have fallen 2.2% between September 2011 and September 2012. Good deals can be found in Melbourne's inner suburbs, which also benefit from excellent transportation links into the city. In comparison to Sydney, housing prices are anywhere from 20-45% lower on average. Those interested in commercial Melbourne real estate investments can also benefit from affordability. The international real estate company Cushman and Wakefield found that Melbourne is the most affordable city in Australia in which to lease an office.
Melbourne's most expensive suburbs have declined slightly in price, making these attractive areas of the city more available to first-time homebuyers. Other factors influencing the availability of real estate include low interest rates and government assistance for first-time homebuyers.
With affordable housing prices, more first-time home buyers have been able to purchase property in the past decade. This has led to an increased demand for housing, providing higher gains for property owners. Some forecasters believe that there will be an under-supply of new housing throughout Victoria in the years to come, due to a rising population. Compared to other capital cities, population growth in Melbourne is rising at a steep rate, around 4% each year. Property investments in Victoria could pay off with significant price increases as this demand continues to grow.
Those looking for residential property will find many affordable and convenient options, but another reason to think about purchasing Melbourne real estate is with an eye towards rental income. Just as there is estimated to be a housing shortage in the future for buyers, there will also be low vacancy rates in rental properties as well. The growing population means that those who invest in rental units will find that they are highly unlikely to experience any periods of vacancy, and can charge fair yet lucrative rates. This high demand for rental properties has grown over the past several years and is expected to continue along with the population growth.
Melbourne is a lively, sophisticated city that hosts exciting world conferences and cultural events. Yet it's also a convenient place to live, with an advanced and modern infrastructure. Those who choose to invest in Melbourne's suburbs will find a range of road and rail links to connect them into the city, along with clean streets and well-tended motorways. The government has increased recent investment in Melbourne's infrastructure, to update city services and provide modern conveniences that put this city high on the list of the world's most liveable urban areas.
With an affordable housing market, incentives for first-time homebuyers, and high demand for property; the overall picture for investors in Melbourne is looking bright. A consistent upward trend in population and a lack of new development should keep demand high, with those who invest now benefiting from the greatest return on investment.