Melbourne real estate: Box Hill, Clayton in Top 50 suburbs for investors

Two suburbs in Melbourne’s east are proving to be hot property for investors. Find out why.

The Irving Domain development planned for Irving Ave, Box Hill.

Box Hill and Clayton are proving to be hot property with buyers, with both named in the 50 best Melbourne suburbs to invest in 2021.

The booming suburbs have been identified by realestate.com.au as strong performers in three key investor metrics: long-term capital growth, rental yields and demand from tenants.

Buxton Box Hill director Calvin Chan said it was no surprise to see the “blue-chip” suburb of Box Hill be popular with investors.

“It's got a lot to offer, it’s close to the CBD and public transport, and shopping centres, with Box Hill Central undergoing a $40 million revamp,” he said.

“These are all positive things and will help boost the suburb.”

Mr Chan said with more and more high rise apartment buildings being constructed in the suburb, there were plenty of options for investors.

“Box Hill will probably punch above its weight for the next couple of years, especially if the government and private sector are going to pour more and more money (into the suburb),” he said.

Buxton Box Hill director Jim Chen said the suburb had a lot to offer.

“When you’re looking for capital gain I think Box Hill is the only suburb with a lot of 30-level apartments,” he said.

“You’ve got hospitals, trains, transport, everything (close by).

“If you’re buying a block of land in a normal suburb, you’re not going to have the potential for it to become a high-rise in the future (unlike in Box Hill).”

He said house prices in Carrington Rd and Irving Ave had “gone up a lot”.

Mr Chen said two blocks of land in Irving Ave, measuring 650sq m each, had recently sold for a combined $12.2m.

“These kind of prices I don’t think you could achieve in any other normal suburb,” he said.

Clayton has also proved popular with investors, where major infrastructure projects including the suburban rail loop, Monash Heart Hospital, and level crossing removals are helping to attract buyers.

The data explained

The list was created by realestate.com.au to feature suburbs in the top half of distribution for three metrics:

1. 10-year median price growth: percentage change in median price in year to June 2021, compared with year to June 2011

2. Rental yield: how much profit you generate from your investment as a percentage, calculated by determining the annual median rent as a proportion of the median price

3. Annual change in rental demand: based on searches on realestate.com.au by “high-intent renters” who have looked at multiple properties, made inquiries with agents, booked inspections, etc.

Investor cashflow: the monthly rent a property earns minus monthly mortgage payments (assuming a 30-year mortgage, 80 per cent loan, 2.73 per cent interest rate)