Melbourne’s hopeful home buyers can find better value by looking to the west of the city, where houses can still be purchased for less than $1 million.
For many Melbourne home buyers, purchasing further from the CBD has become a necessity rather than a choice. High interest rates, the search for more space, and rising living costs are pushing house hunters out of the inner city and into surrounding suburbs.
The cheapest suburb for houses within 10 kilometres of the CBD is Maidstone, where the median price reached $849,322, CoreLogic data shows.
Other options under $1 million include West Footscray ($958,940), Footscray ($971,922) and Bellfield ($980,811).
Meanwhile, for buyers looking to purchase houses within five kilometres of the city, there are no suburbs under the $1 million mark. The most “affordable” option is Kensington with a median price of $1.12 million, followed by Flemington, Collingwood and Abbotsford.
With houses becoming out of reach for many people wanting to live close to the CBD, apartments are becoming a more viable alternative. Carlton offers the cheapest units with a median price of $367,212, followed by Travancore ($385,289) and Flemington ($451,920).
“One of the most surprising things in the data is that the cheapest units in Melbourne are actually found in the heart of the city,” says Eliza Owen, CoreLogic’s Head of Research.
Many buyers are hesitant to purchase apartments close to the CBD due to concerns about space, liveability, and capital growth.
“A lot of these [inner city] medians are skewed by very high-density developments, and not the kinds of apartment sizes that might be suitable for long-term accommodation. There tend to be a lot of renters, holidaymakers, and students who live in these smaller apartments,” she said.
“Affordability comes at a cost… There are some pretty viable options for home ownership. It’s just that they do come at a compromise by distance or space.”
Buying a house within five kilometres of Melbourne’s CBD remains expensive, even in the most affordable suburbs.
“Even though they’re the cheapest within that five-kilometre radius, they’re certainly not cheap,” said Owen.
“Historically, some of these areas may have had a lower socioeconomic profile, which is why they’re inherently lower than most other suburbs close to the city.”
Flemington, for example, offers a comparatively affordable option within five kilometres of the CBD, with a median house price of $1.12 million. Sam Abboud, director of Woodards Real Estate Ascot Vale, said the lower median is due to smaller properties.
“It is a reasonably affordable suburb. Typically, the land size of traditional houses in Flemington are actually compact compared to potentially some neighbouring suburbs within that five-kilometre radius of the CBD.”
Flemington’s typical buyer is a young professional couple looking for convenience without the premium price tag. Abboud said these buyers often prioritise proximity to work, easy access to public transport, and a vibrant community atmosphere.
“[Flemington] is reasonably close to the city, you still have a really good energy and lifestyle … a lot of them are first home buyers as well. They’re just trying to get their foot in the door, and it’s pretty affordable to buy a little house there.”
The affordability crisis means many buyers who would prefer to purchase closer to the city simply can’t, leading them to suburbs in the five-kilometre to 10-kilometre ring like Bellfield, Coburg North, and Pascoe Vale instead.
“There just aren’t as many buyers at that $1 million-plus price range because of high interest rates, because of cost-of-living pressures and the affordability constraint is pushing buyers further and further out … It’s more of an acquiescence rather than a first preference,” Owen said.
“There are some relatively affordable house markets [further out], but then you’re having the compromise on access to work, distance from amenity, even the style and nature of the housing developments.”
Bellfield has become one of Melbourne’s hidden gems with a median of $980,811 for a house. Director of Jellis Craig North East Kieran Whaley says the “family-friendly” suburb has become a desirable alternative to its more expensive neighbour Ivanhoe – offering proximity to key amenities at a lower price point.
“You’ve got access to the Austin, Mercy, and Repat hospitals, as well as La Trobe University.”
His buyers tend to be families or first-home buyers looking to get more for their money. A 300- to 400-square-metre block can fetch $700,000 to $800,000, while larger square metre blocks are selling in the mid-to-high $1 million range.
While Bellfield was once overlooked due to its reputation, it has transformed over the years. “Many, many years ago, nobody really wanted to go into Bellfield, Heidelberg Heights and Heidelberg West, because of the reputation it carried for so many years. But that is long gone.”
Source: Domain
