Buying an apartment in Melbourne – what to look out for

Melbourne is a vibrant and exciting city, renowned for its laneway culture and its eclectic mix of restaurants, bars and galleries. If you’re considering making a move there, or purchasing an apartment there as an investment, you may be curious about what features to look out for and what areas of town have the most to offer a prospective purchaser, both in terms of liveability and investment opportunities .

How much money do you need to buy an apartment in Melbourne?

According to recent data from realestate.com.au, the median price for an apartment in Melbourne is currently $550,000, with the price rising 0.9% in the 12 months from May 2023 to April 2024. That said, one of the key factors determining an apartment’s cost is its size. Per realestate.com.au’s figures, at the time of writing, the median price for a one-bedroom apartment in Melbourne sits at $400,000, whereas a two-bedroom is $600,000 and a three-bedroom is $1,070,000.

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What features should you look for in a Melbourne apartment?

When choosing an apartment in Melbourne, it is important to consider things including the size and location of the apartment development or complex, the layout and design of the apartment itself, and the future potential of the suburb. According to real estate agents Nelson Alexander, smaller apartment developments and blocks may be more desirable, as they can have lower body corporate fees, and potentially higher resale prices relative to apartments in large complexes, where there may be several similar properties on the market.

Location is important when choosing an apartment. Nelson Alexander also points out that Melbourne has many vibrant inner-city suburbs with cafes, but that if you wish to purchase an apartment close to the city in order to enjoy this lifestyle, you may need to sacrifice on space in order to do so.

When considering the layout of an apartment itself, they say that layout is important, and amongst other things, it may be desirable to have windows in as many rooms as possible, to maximise daylight and also provide ventilation. Similarly, they suggest seeking out an apartment where the spaces are wide rather than narrow, as this can make a space more liveable. Quality fittings and fixtures are also important.

Another consideration is the future of the suburb itself. You may want to consult with a real estate agent or local council about planned developments in the immediate vicinity of the apartment you plan to purchase. For example, a large planned apartment development next door to the building where you plan to buy could block out your view, and potentially lower your resale value if many more similar properties end up on the market.

On the other hand, an infrastructure project like shops or a cultural precinct could make the lifestyle in a particular suburb more appealing, and potentially improve the resale value of your apartment.

How do I choose an apartment in Melbourne?

When choosing an apartment in Melbourne, the purpose behind your purchase may guide your decision. If you are seeking lifestyle and access to amenities, then you may opt for a suburb that has a high standard of liveability, although it is worth being aware that the more liveable a suburb, the higher the price tag might be. On the other hand, if you are seeking to invest, then you may opt for a suburb that can offer a high rental yield. Below is a snapshot of Melbourne suburbs, based on both their liveability, and how appealing they might be to investors.

What are Melbourne’s most liveable suburbs?

If a suburb’s liveability is a priority for you, then you may seek out areas that have the  best to offer in terms of amenities and lifestyle. According to Place Score’s 2023 Australian Liveability Census, which considered the top local government areas in major cities, Melbourne residents highly rate suburbs that they perceive to be green, clean and walkable, as well as convenient to amenities. The Top 5 most liveable local government areas in Melbourne, according to their data, are:

1. Boroondara (including suburbs like Hawthorn, Kew, Balwyn and Glen Iris)
2. Port Phillip (including suburbs like Balaclava, South Melbourne, Ripponlea and Elwood)
3. Bayside (including suburbs like Brighton, Hampton, Black Rock and Sandringham)
4. Darebin (including suburbs like Northcote, Coburg, Thornbury and Reservoir)
5. Stonnington (including suburbs like Malvern, Glen Iris, Toorak and Prarhan)

What Melbourne suburbs are best to invest in?

According to Canstar’s recent Rising Stars Property Market Report, if you are looking to invest in a unit in Melbourne, the top 10 suburbs to invest in (sorted  in descending order of median rental yield and then alphabetically) are:

1. Brunswick East (4.8%)
2. Mill Park (4.6%)
3. Ascot Vale (4.5%)
4. Frankston (4.5%)
5. Northcote (4.3%)
6. Oakleigh (4.3%)
7. Boronia (4.0%)
8. Mitcham (3.6%)
9. Nunawading (3.5%)
10. Collingwood (1.2%)

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