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Best Suburbs to Invest in Melbourne in 2022

Melbourne’s property market was hardest hit by the COVID-19 pandemic, but housing values have bounced back strongly.

Now we’re hearing rhetoric that the city’s real estate market is easing, which means deciding where to invest in 2022 is likely to be a much more considered call.

The latest CoreLogic Hedonic Home Value Index, released on April 1, shows Melbourne’s housing market saw the quarterly rate of growth slow from 5.8% in April last year to just 0.1% over the past three months.

The median house price in Melbourne is now on the cusp of breaking the $1 million barrier at $999,037 and the median unit price is sitting at $629,072, according to CoreLogic.

Despite the softening market conditions being experienced nationally, Melbourne’s rental market is sustaining an increase of 4.9% in rental prices for houses and 6.9% for units in the past year.

So, what are some of the Melbourne suburbs to watch if you’re considering making an investment this year? We’ve collated our picks below.

Officer

Located 48km south-east of the Melbourne CBD, Officer has a lot of pull when it comes to property buyers.

As well as its close proximity to the train line and Princes Freeway, Officer has been popular because of its affordability and the fact that it’s a constant performer.

Real Estate Institute of Victoria (REIV) data shows there was 1.7% growth in the median sale price in the quarter to December 2021, with the median price at $683,000.

On the rental front, properties in Officer attracted rents of around $410 a week and a rental yield of 3.2%.

Satterley’s popular masterplanned community, Arcadia, located in Officer, includes three new schools, a childcare centre and not to mention the mind-blowing Dragon Park playground.

Arcadia estate in Officer

Caroline Springs

In Melbourne’s outer western suburbs, Caroline Springs has been a significant performer in the past year with median house prices jumping 10.9%.

The suburb, 21km west of the CBD, has seen solid growth in property values with median house prices surging from $745,000 in the September 2021 quarter to $826,500 in the December quarter, according to REIV.

Caroline Springs enjoys a rental yield of 3.1%, well up on the average for the metropolitan area at 2.3%. A four-bedroom home there will rent for around $470 a week.

Tarneit

Long used as agricultural grazing land, Tarneit has seen a major shift in its demographic thanks to urban sprawl with residential subdivision starting 30 years ago.

Situated 24km west of the Melbourne CBD, the well-positioned suburb has seen an influx of new housing developments, including Satterley’s Bluestone estate.

The estate features over 13 hectares of open space, as well as a comfortable 40-minute commute to the CBD from nearby Tarneit Train Station.

In the quarter to December 2021, Tarneit house prices increased by 5.2% to a median of $618,000, while the suburb also offers solid rental returns of around 3.3% with the median weekly rent around $380.

Tarneit recorded a population of 34,562 at the 2016 Census and there are estimates more than 63,000 will call the suburb home by 2031.

St Helena

Considered a true hidden gem by some, St Helena is a small leafy suburb located 26km north-east of the Melbourne CBD.

Surrounded by generous open spaces, the established suburb provides easy access to excellent schools and transport options. Categorised by small cul-de-sacs and crescents, the neighbourhood boasts plenty of parks, playgrounds and ovals within easy walking distance.

St Helena’s strong performance in the housing market has seen property prices increase by 26.4% for the year to December 2021, rising to a median of $1.22 million.

Satterley’s St Helena Place estate, launched in February 2022, promises to offer a boutique residential community surrounded by fully rejuvenated wetlands – an exclusive “hidden oasis” within the larger and more well-known Greensborough area.

St Helena Place's rejuvenated wetlands (render)

Melton South

With an established community, Melton South has grown from rural roots and compliments the satellite city of Melton, which is well serviced by rail, a variety of schools and a campus of Victoria University.

Located 37km west of Melbourne, the suburb has been a standout for property price growth with an incredible increase of 18.4% in median property values late last year.

REIV data shows the median house price surged by around $80,000 in just six months, rising from $430,750 at the September 2021 quarter to $510,000 for the December quarter.

The rental yield is around 3.6% and a four-bedroom house attracts about $370 a week.

Pakenham

Regarded as one of Melbourne’s fastest growing suburbs over the last 20 years, Pakenham has seen a substantial increase of new residential development and infrastructure and its population is only expected to continue increasing.

Located 54km south-east of the CBD, Pakenham is an established suburb with access to great schools, shops, and direct transport links into the city.

In the December 2021 quarter alone, Pakenham median house prices increased by 2.8% to $638,000 and units increased by 6.8% to a median price of $470,000.

Rental yields in Pakenham are well above the Metro Melbourne average, with a 3.2% yield for houses and 4.2% rental yield for units.

Satterley’s new Maple Grove estate, launching soon in Pakenham East, is set to be a popular option for homebuyers looking to move into the established suburb.

Maple Grove estate in Pakenham East (render)

Greenvale

Located 21km north of Melbourne and just 10 minutes’ drive to Melbourne Airport, Greenvale has been praised for its perfect position.

A hugely popular suburb, which has seen incredible demand for Satterley’s True North community, Greenvale has experienced solid growth in recent months.

REIV statistics show Greenvale sustained a 4.4% increase in house prices in the quarter to December 2021 to net a median sales price of $921,000.

On the rental front, the suburb averages a rental return of 2.7% and a median rent of $451 a week.

Mickleham

Alluring for both families and investors, Mickleham in Melbourne’s north, is a favourable option for real estate not the least because of its steady price growth, but attractive rental returns.

REIV statistics show Mickleham enjoyed 3.9% price growth in the quarter to December 2021 and a median sale price of $653,000.

The suburb is also an attractive proposition for investors with average rental returns of around 3.4% and weekly rents of $400.

Mickleham is forecast to see a significant boost in the number of dwellings from 1090 in 2016 to 8221 in 2026.

Satterley’s Botanical estate, 29km from the Melbourne CBD, promises over 30ha of planned open space, including a 22ha Botanical Park with wetlands, a playground and botanical themed gardens.

For commuters, Botanical has easy access to the Tullamarine Freeway and Donnybrook railway station, with a 45-minute train ride to the city.

Botanical's Stage 4 park in Mickleham

Seaford

Head 36km south-east on the Nepean Highway and you’ll find Seaford, a bayside beauty that enjoyed 11.5% growth in the quarter to December 2021.

REIV data shows Seaford’s median house prices rose from $803,000 to $895,000 quarter-on-quarter, with the average days on market at 23 – considerably less than the average of 33 days across the metropolitan area.

Investors may also see opportunity in Seaford, which attracts a median rent of $450 a week and average rental return of 2.7%, which sits just above the 2.3% yield for metropolitan Melbourne.

As well as the bayside lifestyle, there is Kananook Creek and the Seaford Wetlands, a 305ha nature reserve listed on the Register of the National Estate, which is home to a variety of bird life including several rare and endangered migratory species.

Donnybrook

Just 32km north of the Melbourne CBD you’ll find Donnybrook, a suburb that’s set to experience tremendous population growth. Formerly used as grazing paddocks and farmland, Donnybrook is a relatively new suburb that has been rezoned for residential use.

New families have been attracted to the area due to its great location, with convenient access to nearby Craigieburn Central Shopping Centre and transport options via Hume Freeway and Donnybrook Railway Station.

REIV data shows Donnybrook’s median house sale price has risen 9.6% for the year to December 2021, to net a median of $610,000.

Rental values are also attractive in the area, with houses averaging a 3.6% rental yield and a median rent of $420 a week.

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