Yarra Glen and Healesville have been listed in Victoria’s top 20 investment-grade suburbs where buyers have a negotiating edge.
The top 20 has been found through new research commissioned by Well Money (formerly known as Well Home Loans).
The research began by considering every suburb in Victoria, before filtering out suburbs:
● That weren’t investment-grade
● Where demand had not been falling
● Where prices had not increased by at least 45 per cent over the past decade
That left a small list of investment-grade suburbs where conditions are favourable to buyers and where investors know they have plenty of bargaining power – because even if they offered a 10 per cent discount, vendors would still be giving up only a fraction of the profits they’d made in the previous decade.
(For the entire research criteria, go to the FAQ on p11.)
The list includes 14 house and six unit markets.
Well Money (formerly Well Home Loans) CEO Scott Spencer said this ranking was designed to help investors who wanted to buy in quality locations in Victoria and hold a negotiating edge over vendors.
“Buyers hold a negotiating advantage in each of these suburbs right now, because vendors have enjoyed capital growth of at least 45 per cent over the past decade. So even if they were to reduce their asking price by 10 per cent, they’d still finish well ahead,” he said.
“Another reason why buyers have the edge in these suburbs is because market conditions have been turning in their favour, as demand relative to supply has been falling.”
Mr Spencer also noted that the suburbs in this report are quality, investment-grade locations.
“All of them have low inventory levels, which will put upward pressure on price growth, and low vacancy rates, which will put upward pressure on rental growth. So the data suggests that investors would be more likely than not to enjoy positive returns,” he said.
However, Mr Spencer urged investors to be prudent with their finances.
“Interest rates have been rising and will probably increase even further in the first half of 2023, so investors need to budget for higher repayments. It’s risky to enter the market if you don’t believe you’d have the capacity to cope with higher interest rates.”
Yarra Glen came in at number eight and Healesville at number 11.
The house market of Yarra Glen 3775
Indicator Result
Median asking price – December 2022 $850,000
Net price gain over past 10 years 101 per cent
Years of profit lost if vendor sells for 10 per cent discount 2.0 years
Suburb inventory level 2.9 months
Vacancy rate 1.4 per cent
The house market of Healesville 3777
Indicator Result
Median asking price – December 2022 $860,000
Net price gain over past 10 years 101 per cent
Years of profit lost if vendor sells for 10 per cent discount 2.0 years
Suburb inventory level 2.8 months
Vacancy rate 0.4 per cent
