From Elsternwick to Yarraville — Melbourne’s most undervalued suburbs revealed | Suburb Data

The city’s most undervalued suburbs that are tipped for imminent price growth have been revealed, which include three areas where median house prices sit at less than $1m.

Melbourne’s most undervalued suburbs range from the inner city to the outer north and northwest, according to property investor data provider Suburb Data.

Melbourne homebuyers have been given a hit list of the city’s most undervalued and underrated suburbs ripe for future price growth.

New figures have revealed 20 suburbs where homebuyers are getting the best of the market in areas from Elsternwick to Ormond in the inner south, Fairfield and Blackburn in the east and Spotswood and Yarraville in the inner west.

There are also threesuburbs with a median house price below $1m, including Campbellfield, Coolaroo and Sydenham.

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There were another two just above $1m, Maribyrnong and Yarraville.

Property investor data provider Suburb Data ranked the Melbourne ‘burbs among the best in the nation, based on demand to supply values.

The firm scored each area out of 100, with higher marks meaning more demand compared to supply, resulting in a greater chance of future price growth.

Undervalued suburbs are often more affordable than nearby areas, have similar house and unit prices and can be at a point where growth is likely after a period of stagnation.

Several Mornington Peninsula towns and suburbs ranked in the 20 most overvalued spots, where many people have been selling their investment and holiday homes as the state government’s land tax rise has started to bite.

This four-bedrom townhouse at 1/46 Clarence St, Elsternwick, is for sale $1.55m-$1.7m asking range. The suburb has been ranked as Melbourne’s most undervalued area.

Buying a house can be stressful but picking a suburb poised for price growth can take away some of the worry about future security.

Suburb Data analyst Jeremy Sheppard said “undervalued” suburbs would likely see imminent price rises because houses there were better value than surrounding areas and were “due to catch up growth”.

“You can buy with a lot more confidence in an undervalued market because once buyers recognise that better value, demand goes up and prices go up,” he said.

Mr Sheppard said Melbourne might have more room for growth than other capitals because much of its market has been dormant longer.

“It’s not a market that’s about to go off, but its market cycle is at a better point than the other big capitals,” he said.

“The opportunities to buy well are increasing.”

A California bungalow at 5 Lillimur Rd, Ormond, for sale with a $1.55m price tag.

Biggin & Scott Elsternwick director Bill Stavrakis said as a broad rule, demand exceeded the amount of stock available in his patch.

“It is undervalued for what you are getting in terms of bang for your buck,” Mr Stavrakis said.

He said this was because of the area’s well-regarded schools, public transport, cafes, entertainment options and the nearby beach, with Elwood pads usually costing up to 40 per cent less than residences in Brighton – which is less than 5km away.

On the market with a $920,000-$1m asking range is this three-bedroom house at 6 Arras St, Spotswood, in Melbourne’s inner west.

Matthews Agency senior broker Joel Taylor said Maribyrnong was popular thanks to its housing diversity, including townhouses and apartments only 8km from Melbourne’s CBD and jobs in the northern and western suburbs’ industrial parks – plus proximity to Footscray and Moonee Ponds’ trendy cafes.

“Maribyrnong medians are about $1m, it’s almost like you’re getting a house and lifestyle package, not a house and land package,” Mr Taylor said.

“Suburbs with good fundamentals like Yarraville and Maribyrnong are always going to be in demand.”

At 5 Woorrwarren Lane, Blackburn, is a four-bedroom house with $1.346m-$1.48m price expectations.

Advantage Property Consulting director and buyers advocate Frank Valentic said the three undervalued suburbs with the lowest median prices — Campbellfield, Coolaroo and Sydenham — offered good value compared to Melbourne’s median house price, which PropTrack puts at $914,000.

However, Mr Valentic said some of the more-expensive areas on the list did not represent as much value for buyers, in financial terms.

His advice to buyers wary of overpaying was to avoid spending more than a suburb’s median value when purchasing a home; to steer clear of new builds as developers and builders were factoring elevated construction costs into their asking ranges; and to consider buying close to hotspots.

“In many parts of Melbourne, just follow the train line out one or two more stations,” Mr Valentic said.

Emilee and Matt McHugh, with their 17-month-old son Fletcher, lived Maribyrnong for five years and recently moved a short distance away. Picture: Brendan Beckett.

For Emilee and Matt McHugh, moving to Maribyrnong offered both great value and a fantastic lifestyle.

About five years ago, the parents to son Fletcher, now 17-months old, bought a townhouse in the inner western suburb.

They enjoyed daily walks around the Maribyrnong River and living close to Highpoint shopping centre, Aberfeldie’s sports facilities and cafes, Yarraville’s eateries and Melbourne’s CBD.

“I think the main takeaway for us is the lifestyle, going around the river, good access to public transport and other great inner northern and western suburbs – being near all those sought-after places, but without the crazy price points,” Ms McHugh said.

A two-bedroom, Victorian-era terrace at 22 Birkenhead St, Fitzroy North, with a $1.3m-$1.4m asking range.

Mr McHugh said he was unsurprised Maribyrnong was among Melbourne’s most undervalued suburbs, as some pockets were considered flood-prone – making those outside the risk zone more in-demand.

“I think when the Maribyrnong floods happened two years ago, it left limited pockets which would be attractive to people,” he said.

The couple recently upsized to a new house about 12km from Maribyrnong.

Mr McHugh said they had hoped to buy in Maribyrnong but after searching for a while, had found a residence nearby that suited them in terms of space and came with the added bonus of being close to family.

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