The REIV recently compiled figures from the June quarter highlighting where buyers can find the cheapest one, two and three-bedroom apartments in the city, well under the city's median apartment price of $545,500.
According to the REIV, there are suburbs in the Victorian capital where the median price of a one-bedroom apartment is as low as $207,000, while the cheapest two-bedroom units can be found for around $410,000 and the most affordable three-bedroom units at $465,000.
REIV chief executive officer Enzo Raimondo said the prices showed there is still value for money in Melbourne, but Melbourne based buyer’s agent Cate Bakos cautioned people about jumping on a property just because it appears to be a bargain.
In particular, Bakos said she wasn’t overly enamoured with the prospect of Carlton where the city’s most affordable one-bedroom apartments and their $207,000 price tags are located.
“I’d be very fearful of a one-bed apartment in Carlton, they tend to be very small apartments that are very hard to finance and as a result the pool of potential buyers is reduced and that means the price is pulled down as well,” Bakos said.
“The other thing is the owner corporation fees for those buildings, they can be really expensive and really whittle away at any rental yield you could be getting.”
The next most affordable one-bedroom apartments are in Carnegie, an area Bakos is more positive about as the floor plans of apartments tend to run a little larger.
“A lot of the buildings there were built between the 1960s and 1980s and as a result they have a bit more floor space, which means they’re easier to finance and therefore available to more buyers which is good for their prospects of capital growth.”
For two-bedroom apartaments, Melbourne’s most affordable can be found in Footscray($408,000) and Maribyrnong ($410,000) according to the REIV figures, however Bakos again said people need to do some research before rushing in.
“Maribyrnong is about eight kilometres north east from the CBD and is really good value, however there’s not train station there and it only has the one tram that runs there.
“It does have the positives of being right on the Maribyrnong River and well below the median price for the city, but public transport is something tenants really want.”
For Bakos, Footscray in particular is an area where research is paramount.
“Footscray is a bit of an ugly duckling undergoing a transformation at the moment, it’s being gentrified somewhat at the moment and if you pick the right location you could find some value.
“The most important thing in Footscray is to look for what’s planned for the area you’re buying in, there’s a lot of streets that are packed with high density developments and as they become overrun they lose their homely feel and there’s some streets I wouldn’t let my kids walk down by themselves.”
The city’s most affordable three-bedroom apartments can be found in Glenroy, where the median price is $465,000 and Bakos said the right property in the area could be a sound investment.
“Over the last few years there’s been a lot of sub-division and development in Glenroy and there’s a lot of relatively new townhouses that are available there at the moment.
“It’s right on the train line and it’s also accessible by the toll way and if you can find a property with a good land to asset ratio then that property would have some real merit to an investor.”
