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Most profitable investment suburbs revealed

By Staff Reporter
Gold Coast
37

An online property portal has identified the suburbs that investors in one major city should target, based on affordability and tenant demand.

RealestateVIEW said rising property prices in Melbourne mean local would-be buyers will increasingly be looking to rent as a convenient solution.

“For investors, both domestic and international, demand for rental accommodation means that buy-to-let is a lucrative opportunity,” the portal said.

According to realestateVIEW, with rental yields weakening, largely due to climbing prices, investors should look at "the size of each private rental sector (in terms of share of households) and the median apartment price".

Using these metrics, realestateVIEW identified "the 10 most affordable - and therefore more profitable - Melbourne suburbs for investors". 

Carlton
Price: $276,000
Private rental share: 65 per cent

RealestateVIEW said Carlton is a popular hub for students, which helps to give it the city’s biggest private rental sector.

Melbourne
Price: $337,500
Private rental share: 63.1 per cent

The heart of Melbourne is, of course, home to the city’s central business district, making it a focal point for workers hunting for a place near to the office.

RealestateVIEW said prices are notably higher than Carlton, but demand from tenants is equally strong.

Southbank
Price: $492,500
Private rental share: 58.9 per cent

Southbank is one of the more affluent zones of Melbourne, according to realestateVIEW.

“As a cultural hub with new developments springing up, though, the rental market is summed up by the 92-storey Eureka Tower: extravagant, but too big to dismiss,” the portal added.

Parkville
Price: $490,500
Private rental share: 56.8 per cent

Parkville is a pricey part of Melbourne located close to the CBD and home to the Royal Park.

“However, with university and medical institutions both in the suburb, tenants still outnumber private owners, as convenience compensates for the higher costs than neighbouring Carlton,” realestateVIEW said.

West Melbourne
Price: $521,500
Private rental share: 56.7 per cent

According to RealestateVIEW, the industrial zone is not at the top of a flat hunter's wish list.

However, it said its proximity to the CBD makes it a potentially profitable option for landlords, since private renters outnumber property owners.

South Yarra
Price: $416,250
Private rental share: 56.3 per cent

South Yarra is one of Melbourne’s top shopping districts and is also home to some of the wealthiest homeowners in the city, the property portal said.

“Nonetheless, the private rented sector still makes up over half of the property market,” it added.

East Melbourne
Price: $448,500
Private rental share: 55.4 per cent

East Melbourne is home to many parliamentary and local authority buildings, which makes it a sought-after area for official employees.

Despite some wealthy households, there are many apartment blocks in the area, which are popular among its sizeable rental population.

North Melbourne
Price: $471,000
Private rental share: 48.6 per cent

A growing migrant population and a strong supply of new housing has seen North Melbourne’s rental population expand, making up almost half of the market.

Kensington
Price: $404,500
Private rental share: 38.9 per cent

RealestateVIEW said Kensington’s property market is highly diverse, from industrial and commercial property to an array of new houses and social housing flats.

“The population is growing slowly, with a small number of students in the area, but with house prices on the up, renting is not an uncommon choice among its professional residents and families,” it said.

Flemington
Price: $312,000
Private rental share: 33.7 per cent

While the size of Flemington’s rental market is far below that of Carlton or Parkville, the area’s low apartment prices make it a suburb worth considering for budget buy-to-let investors, realestateVIEW said.

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