Property buyers in Melbourne should look at suburbs such as Epping, Ringwood

SEARCHING for Melbourne’s next real estate hotspot? Don’t be afraid to hunt around the ‘ugly duckling’ suburbs.

Generic photo of an Australian couple looking at property

BUYERS searching for Melbourne’s next real estate hot spots should look to middle and outer ring, and not be afraid to househunt in an “ugly duckling” suburb.

This is the advice imparted by the latest Hotspotting report, which has identified the booming Ringwood and Banyule areas, the affordable Epping and Casey regions and gentrifying Sunshine as the property markets set to experience stellar price growth.

The report argues that battler suburbs in these areas boasting affordability, improving infrastructure and job prospects have the potential to transform from “ugly ducklings” into “real estate swans”.

Hotspotting founder Terry Ryder said buyers seeking capital growth should forget Melbourne’s millionaire inner suburbs as they’d “well and truly passed their peak”.

He said a ripple effect had seen the middle suburbs take over as the city’s standout performers last year, but that momentum had now “rippled out further” to the point where the middle and outer ring would enjoy the best gains this year.

Within that ring, Hotspotting picked property markets in the Ringwood and Banyule areas in Melbourne’s middle east and northeast to perform in the coming months.

Mr Ryder said housing markets in Croydon, Heathmont and Ringwood, and Heidelberg, Ivanhoe and Watsonia were benefiting from buyers being priced out of neighbouring suburbs closer to the CBD.

“They’re reasonably affordable, vibrant communities with a good standard of housing and good transport connections,” he said.

Ringwood had also enjoyed a major cash injection into infrastructure in recent times, with the redevelopment of its railway station and the Eastland Shopping Centre.

The Epping and Casey regions were chosen as emerging hot spots because they offered affordability, infrastructure and job opportunities.

Mr Ryder said Epping in particular had become a jobs hub with the relocation of Melbourne’s fruit and vegetable markets and improved road links attracting warehousing and distribution businesses.

The report said Sunshine was shaking its battler tag and luring buyers with affordable housing, closeness to the CBD and infrastructure developments.

“We’re seeing gentrification in Sunshine,” Mr Ryder said.

“If you get in when that process is just getting underway, you’re getting in affordably.”

The $935,000 sale of a five-bedroom California bungalow on Cornwall Rd, Sunshine last month suggests prices are already on their way up in the inner western suburb.

Barry Plant chief executive Mike McCarthy said sales figures recorded by his group — which primarily operates across middle and outer Melbourne — supported Hotspotting’s contention that home prices were booming beyond the inner city.

“Since last May, we’ve seen double-digit year-on-year price increases,” Mr McCarthy said.

“Broadly speaking, we contribute that to a ripple effect of people being pushed out from Blackburn to Ringwood, Yarraville to Sunshine, Northcote and Preston to Reservoir and beyond in the north.”

@SamLandy