Melbourne’s property market has long been known for its dynamism. It has undergone significant transformations in recent years, with various properties experiencing varying demand levels.
The city’s growth, lifestyle changes, and evolving trends shape the properties buyers and investors most seek. In this blog post, we’ll explore the latest property trends in Melbourne, focusing on the types of properties currently in high demand and why these properties have become so popular.
Let’s Get Straight To The Point
Melbourne’s property market is dynamic, with varying demands across property types. Detached houses in the middle and outer suburbs are highly sought after by families due to their space and proximity to amenities.
Heritage properties with historical charm are also in demand. Inner-city apartments remain popular, especially among young professionals and students, offering affordability and convenience.
Investors are drawn to areas with low vacancy rates, strong rental demand, and infrastructure growth, particularly in high-growth outer suburbs. Sustainable features and A-grade properties also stand out for their appeal.
Location, property type, and long-term trends are key to navigating Melbourne’s ever-evolving property landscape.
Houses: A Strong And Growing Demand
Melbourne’s love affair with houses is longstanding, with houses continuing to be highly sought after, particularly in the city’s middle and outer suburbs. Many families are looking to upgrade to larger homes, where they can enjoy more space, and this demand is set to remain strong for the foreseeable future.
As Melbourne’s population grows and its suburbs expand, houses remain attractive for families and investors. Below are some key factors that contribute to the increasing demand for houses:
Large, Detached Homes
In recent years, there has been a marked rise in the demand for large, detached homes.
This trend is mainly driven by the need for more space, with larger families or people working from home seeking homes that offer greater privacy, more living space, and the ability to accommodate home offices.
Melbourne’s middle and outer suburbs have seen an influx of buyers looking for homes with four to six bedrooms.
- Popular Suburbs: Areas such as Camberwell, Kew, and Glen Iris have seen a marked demand for large homes due to their proximity to schools, parks, and other amenities.
- Family-Oriented: Families, in particular, are drawn to these larger properties because they provide ample space for children, pets, and hobbies. These homes often come with large yards, which are increasingly important to buyers post-pandemic, as outdoor space has become a valued commodity.
Heritage Properties
Another intriguing trend is the rising demand for heritage properties. Melbourne has a rich history and several period-style homes, including Victorian, Edwardian, and Art Deco houses.
Many buyers are drawn to these homes’ unique character and charm, and there’s an increasing trend of people looking to preserve and restore these historic properties.
- Cultural Significance: Heritage homes offer a glimpse into the past, and for many buyers, they represent a sense of cultural connection to Melbourne’s history.
- Sustainability and Preservation: There’s also a growing interest in restoring heritage properties in an environmentally conscious manner, incorporating energy-efficient features, sustainable materials, and modern amenities while maintaining the home’s historical integrity.
Apartments: The Pulse Of Melbourne’s Inner-City Living
While detached houses dominate the outer suburbs, apartments remain the property of choice in Melbourne’s inner city.
As the population density increases, particularly in the central business district (CBD) and surrounding areas, apartments remain one of Melbourne’s most popular property types for buyers and investors.
High-Density Living
With approximately 70% of Melbourne’s residents living in apartments, high-density living has become the norm, especially in the inner-city areas.
As land becomes increasingly scarce in central Melbourne, apartments are the logical solution for many looking to live close to the CBD.
- Appeal to Young Professionals and Students: Apartments, particularly those near universities, cafes, and offices, are highly popular among young professionals and students who seek convenience and proximity to their workplaces and educational institutions.
- Affordable Urban Living: Compared to detached houses, apartments offer a more affordable way to live in the city centre. The proximity to amenities, public transport, and vibrant urban life make apartments an appealing choice for many.
Sustainable And Green Buildings
There has been a discernible change in real estate construction toward sustainability in recent years. Buyers and renters are increasingly prioritising energy-efficient and environmentally friendly properties.
Melbourne’s apartment market has responded with new developments focused on sustainability and green credentials.
- Energy-Efficient Features: Buyers seek properties with solar panels, energy-efficient appliances, and sustainable building materials. These features reduce the environmental impact and lower utility costs for residents.
- Eco-Conscious Demand: Eco-conscious living has become a major factor for many buyers, particularly younger ones, who value sustainability and reducing their carbon footprint.
Investment Properties: Strong Returns In Growing Suburbs
Investing in property has always been a popular avenue for wealth creation in Australia, and Melbourne is no exception.
The city’s robust rental market, combined with the ongoing expansion of its suburbs, has made it an attractive proposition for investors.
Low Vacancy Rates And Strong Rental Demand
Melbourne’s rental market remains strong, with vacancy rates at around 2.3% in July 2023. This indicates high demand for rental properties, particularly in areas with strong growth potential.
Investors can expect strong rental yields as the demand for housing continues to outstrip supply in many parts of the city.
- Rental Demand in Inner-City and Outer Suburbs: While the inner-city areas remain desirable due to their proximity to workplaces and amenities, the outer suburbs are also emerging as lucrative investment opportunities. Areas such as Tarneit, Werribee, and Cranbourne are seeing increased interest from investors due to population growth, improved infrastructure, and affordable property prices.
High-Growth Suburbs And Potential For Good Returns
Investors are particularly keen on properties in high-growth areas, which are showing signs of robust capital gains and rental demand.
Melbourne’s outer suburbs benefit from significant infrastructure projects, including new transport links and the expansion of local amenities, making these areas prime candidates for investment.
- Infrastructure Developments: These suburbs are becoming more appealing due to investments in transportation infrastructure, such as new roads and train lines, and improvements to nearby facilities, such as schools, malls, and medical facilities, boosting their potential for expansion.
- Rising Property Values: As Melbourne’s population expands, demand for properties in high-growth areas is expected to increase property values, resulting in good returns for investors.
Location Preferences: Inner-City And Outer Suburbs
Melbourne is a sprawling city, with distinct differences in the type of properties and the people who live in different areas. The demand for particular property kinds is largely determined by location.
Inner-City Properties
Inner-city properties are always in demand, particularly those close to the CBD.
The lifestyle and convenience of living close to Melbourne’s cultural and economic heart make these properties appealing to professionals and young renters who prioritise proximity to work, restaurants, and entertainment.
- Lifestyle and Amenities: Properties in areas like Carlton, Fitzroy, and Southbank are in demand due to their vibrant lifestyle, rich cultural scenes, and proximity to work. These areas attract young professionals and retirees seeking an active, urban lifestyle.
Outer Suburbs: Increasing Demand For Affordable Housing
While inner-city living remains popular, the outer suburbs of Melbourne are gaining traction, particularly for families seeking more affordable housing options.
Suburbs like Mernda, Craigieburn, and Sunbury have seen significant population growth in recent years, with many families moving further from the city centre and searching for larger homes at lower prices.
- Affordable Housing Options: As housing prices in the inner city continue to rise, more families are seeking homes in the outer suburbs to get more space for their money.
- Benefiting from Infrastructure Growth: These outer suburbs are benefiting from ongoing infrastructure development, including new schools, shopping centres, and improved public transport links, which make them even more attractive to homebuyers and investors.
Property Characteristics In Demand
Regarding property characteristics, certain homes and features are proving more desirable than others in Melbourne’s current market.
A-Grade Homes And Investment-Grade Properties
A-grade homes and investment-grade properties continue to sell quickly due to their high demand and superior quality. These properties typically feature modern designs, high-quality finishes, and desirable locations.
Buyers and investors alike are looking for properties offering long-term value and the potential for growth in rental returns and capital appreciation.
- Fast-Moving Properties: Homes in areas undergoing gentrification, or those close to key amenities like public transport hubs, schools, and parks, are highly sought after.
Properties With Green Credentials
With the increased demand for sustainable living, green properties are becoming more popular.
These homes often feature energy-efficient appliances, sustainable construction materials, and renewable energy sources, making them environmentally friendly and more cost-effective.
Conclusion
Melbourne’s property market is dynamic and diverse, with many property types experiencing high demand. Detached houses, especially large homes in the middle and outer suburbs, continue to attract families seeking more space.
Heritage properties, due to their historical charm, are also becoming increasingly popular. Apartments, particularly in high-density areas near the CBD, remain in high demand, especially among young professionals and students.
Low vacancy rates and high rental demand have made investment properties a top priority for investors, with growth prospects available in inner-city and outside suburbs. Whether you are a buyer or an investor, it is essential to consider location, property type, and long-term trends in Melbourne’s ever-evolving property market.
Frequently Asked Questions
Are Luxury Properties In Demand In Melbourne?
Yes, luxury homes, especially in premium suburbs like Toorak, South Yarra, and Brighton, are highly sought after by affluent buyers, both local and international.
Are Townhouses Gaining Popularity In Melbourne?
Townhouses are becoming increasingly popular as they balance affordability, space, and convenience, particularly in Melbourne’s middle-ring suburbs.
Is There A Demand For Properties Near Public Transport?
Properties near train stations, tram stops, and bus routes are highly sought after as they provide convenient commuting options, particularly in Melbourne’s highly urbanised areas.
Are Smaller Apartments Still In Demand?
While larger apartments are generally preferred, smaller apartments remain in demand among students and young professionals, especially those near universities or major business hubs.
How Does Melbourne’s Property Demand Compare With Other Australian Cities?
Melbourne remains one of Australia’s most desirable cities for property investment due to its cultural appeal, diverse economy, and steady population growth, which strongly keeps demand for all property types.