3.6% capital growth for Melbourne one-bedroom apartments

By the resi financial blog team, 06 January 2014

Capital growth for Melbourne apartments

If you are looking to invest in Melbourne property, now may be a good time to consider looking for the best fixed interest rates on investment loans - particularly as gross rental yields for one-bedroom apartments in the Victorian capital city stand at five per cent.

According to the latest data from the Real Estate Institute of Victoria (REIV), one-bedroom properties in inner Melbourne command the highest weekly rent in the state, averaging $341 a week.

However, figures recorded over the past five years indicate that capital growth is actually higher on one-bedroom properties in middle and outer Melbourne, where five-year annual capital growth stands at 4.2 per cent.

By comparison, this growth in inner Melbourne was recorded at 3.5 per cent - the same as in regional Victoria. The combined city average for one-bedroom apartments over the past five years was 3.6 per cent.

The majority of one-bedroom apartments in Melbourne fall within the $300,000 to $400,000 price range. A total of 30 per cent of the city's one-bedroom apartments cost between $300,000 and $350,000 and are located across 24 suburbs, while a further 24 per cent cost between $350,000 and $400,000 and are located across 19 suburbs.

Earlier this month, the Australian Bureau of Statistics observed that investor activity in the nation's property market is on the rise - and the REIV noted that in Victoria, one- and two-bedroom apartments often represent the best value for investors.

REIV figures also compare the median prices of one-bedroom apartments across the city. In the 12 months to September 2013, the price of an inner-city apartment in Melbourne was $355,500 - a figure higher than the city-wide median average of $340,000.

By contrast, one-bedroom properties in middle Melbourne cost an average of $293,000 in the same time period, while one-bedroom homes in outer Melbourne cost $240,000.

Categories: Property Investment