For the last nine months Melbourne's property prices have increased at a faster rate than Sydney's. In fact, the average house price in the city has grown by an impressive 13.8 per cent over the last year, according to Australian Bureau of Statistics data.
Those numbers are enough to prick the ears of any property investor, but the key to success is knowing exactly where in the city the best opportunities lie. To that end, let's look closer at Melbourne's best value growth suburbs.
Coburg: Melbourne's next big thing
Coburg's more well known neighbour – Brunswick – was one of 2016's hottest growth areas. This year it appears Coburg is sharing in some of the popularity.
It's no wonder as there's impressive value to be found here, just eight kilometres from the city centre. The area's average price is $925,000, – much lower than many surrounding suburbs, indicating there's plenty room left for growth.
The average price has risen by 16.25 per cent in the last year due to strong demand, Smart Property Investment data shows. Rental yields for detached homes are fairly low here, at only 2.8 per cent. Units, on the other hand, cost less than $500,000 on average and have an average rental yield exceeding 4 per cent.
Look to Caroline Springs, an area that may offer the best rental yields in Melbourne.
Caroline Springs: A growing opportunity
For a lower entry point and a higher yield, property investors should look to Caroline Springs, an area that may offer the best rental yields in Melbourne.
This fast-growing area has an average price that's uncommonly low for suburbs surrounding Melbourne – $560,000 for houses, and $400,000 for apartments and units.
Houses yield 3.62 per cent on average, while apartments return 4.81 per cent. Of course, armed with the right local advice and thorough research, a savvy property investor could do better.
Essendon North: Capital gains galore
If you're looking for an asset that will rapidly increase in value the right property in Essendon North could be your best option. The small suburb sits just below the airport, and has seen a startling growth in demand of late. That may be why Residex data shows the median house value here increased by a whopping 24 per cent, during the year ending September. Essendon's recent growth is more proof that our city is one of the country's leading locations for property investment.
Whether you're looking for a high yielding investment in Melbourne's outer suburbs, or a central suburb promising capital gains, there are countless opportunities for investors who are willing to take them.