Melbourne investors do not need deep pockets, or be significantly out of pocket, to reap better than average capital growth and demand rent increases.

A typical landlord in Werribee, Carrum Downs and Doreen has seen their houses appreciate by more than 10 per cent over the past year, Domain Group data shows.

These suburbs – with house medians under $504,000 – have also recorded more than 2.8 per cent annual rent growth and offered at least 4.7 per cent rental yield.

Werribee and Carrum Downs may appeal to investors because they showed a good balance of yield, rent and price growth, Domain Group chief economist Andrew Wilson said.

For an entry-level house median in Werribee, of $403,250, investors achieved 20.7 per cent annual growth and 4.7 per cent yield, he said.

Werribee was attracting more buyers – including interstate investors because of relative affordability, Harcourts Wyndham City’s Jay Radbourne said.

There had been strong infrastructure investment such as the expansion of the Pacific Werribee Plaza, new train line and marina in Werribee South, he said.

“The supply-demand ratio has definitely shifted to the demand side,” Mr Radbourne said. “All of a sudden, Werribee is on the map.”

In Carrum Downs, house prices jumped 13.2 per cent over the year to a median of

$430,000.



O’Brien Real Estate’s Mark Stott said higher house prices in bayside areas such Seaford and Langwarrin was creating a follow-on effect.

People wanted to be close to the bay, but did not want to go further out to Clyde, he said.

“At the moment, first home buyers can still buy in Carrum Downs, but it’s probably going to change in the next couple of years,” he said.

In the north-east, Doreen’s median house price climbed 10.3 per cent over the year to $503,000. Housing estate developments in Doreen may have also influenced the median.

Buyer activity in the area had increased significantly over the past year, Barry Plant Doreen director John Heath said, driven by people priced out from inner suburbs.

“We’ve gone from zero to three buyers through opens to six to 15 on average in the last 12 months,” he said.

Mr Heath believed infrastructure improvements such as the proposed train line to Mernda, more schools and supermarkets and relative affordability of homes would fuel capital growth in the area.

Buyers advocate Miriam Sandkuhler of Property Mavens said Bundoora looked set to next benefit from the ongoing “ripple out effect”, and being close to LaTrobe University made it attractive for students.

The suburb had a tram line connecting it to the inner suburbs and city, and there was a nearby train line, she said.

“Investors should look for period houses on decent land allotments, close to transport and a short drive from LaTrobe,” Ms Sandkuhler said.

On Saturday, Domain Group reported a clearance rate of 80 per cent from 769 reported auctions. There were 180 unreported results.

An investor paid $1,015,000 for a generous one-bedroom apartment at 6/45 Gipps Street in East Melbourne.

Four bidders competed for the 70-something square metre apartment, which sold for above its mid-$800,000 reserve, Caine Real Estate’s Peter Hannon said.

He believed the sale price was a record for a one-bedroom unit in the suburb.

Greville Pabst, of WBP Property Group, said East Melbourne was tightly held and desirable in terms of its location – being walking distance to the MCG, gardens and CBD.

The property itself also ticked a lot of boxes; it was larger than an average one-bedroom unit, in a low-density block and was north facing, he said.

In Albert Park, an owner-occupier paid $1.3 million for a vacant 64 square metre block of land in Richardson Street.

It had a planning permit for a tri-level townhouse, Michael Szulc of Cayzer said, and achieved a new price per square metre record of $20,312 for Albert Park.

He attributed the result – near $500,000 above expectation – to its prime location and extreme scarcity of vacant land in Albert Park.