Melbourne housing affordability: Units in sought-after suburbs offer big discounts for first-home buyers
A two-bedroom, two-bathroom unit at 314/216 Bay Rd, Sandringham recently sold under the hammer for $600,000, more than $1m less than a typical house price in the suburb.
Melbourne homebuyers on a budget have been given a hit list of the best suburbs where they can get a unit for as much as $1m less than the typical house.
And experts have revealed going cheap could leave purchasers very cheerful, with scope for unit values to rise faster than houses in some pockets.
Analysis by SuburbData has revealed a unit can be had in areas from Elsternwick and Williamstown for less than a third of what a typical house costs.
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St Kilda East and Elwood also make the list of areas offering big discounts, as well as scope for future growth.
In Elsternwick there is a staggering $1.205m difference between the suburb’s $581,000 median unit price and the $1.786m cost of a typical house.
Prominent buyer’s agent Cate Bakos said she expected that gap to close in the coming years, making it a potentially lucrative way to get home in a sought-after pocket for far less than your neighbours.
“Elsternwick, Williamstown, and Elwood are unbeatable in location with amenities, infrastructure, and schooling,” Ms Bakos said.
Prominent buyers advocate Cate Bakos with her daughter Gabriella who has finished her final year of school has already set up savings account dedicated to purchasing her first property. Picture: Mark Stewart
“When you look at value (of units) compared to houses, it’s a no-brainer.”
However, she warned budget buyers to think carefully before purchasing in places like Camberwell, despite a $1.665m difference between what you’ll pay for a unit in the suburb compared to a house.
Ms Bakos also advised buyers to prioritise lifestyle needs when choosing a home, a sentiment echoed by Gary Peer St Kilda’s Daniel Peer who said safety, amenities, and aesthetics drew first-home buyers and investors alike to St Kilda East, Elwood and Elsternwick.
Gary Peer St Kilda’s Daniel Peer said safety and amenities were driving first-home buyers to units in the area.
“The neighbourhood perks of safety, parks, shops, and public transport make these suburbs consistently attractive,” Mr Peer said.
The agent said now was an opportune time for first-home buyers and investors to target units in the area, with a number for sale that would balance good growth prospects with personal lifestyle aspirations.
JA Cain Camberwell’s Chris Cain said Camberwell’s attractiveness for both downsizers and young families came down to its vast infrastructure, with multiple train lines, tram routes, shops and sought-after schools.
“This mix of urban and tranquil settings makes Camberwell a highly coveted spot for growing families and young professionals yearning for an ideal suburban lifestyle without straying too far from the city,” Mr Cain said.
“The suburb’s unit affordability compared to houses gives buyers a strategic advantage – I predict a surge in demand that’s likely to persist as Melbourne’s population expands.”
Mr Cain said units in Camberwell weren’t just a financial win for buyers but a lifestyle upgrade.
SuburbData analyst Jeremy Sheppard said the research showed some of the best unit buying opportunities were where units and houses were similarly sized because of small lots for the stand-alone homes.
“So there’s the potential for buyers to get good value in a location where they want to live but can’t afford a house,” Mr Sheppard said.
However, he noted that in some of the truly affluent areas apartment prices only appeared cheap compared to the local house price and may well not be affordable for many.
Melbourne’s top 10 best places to buy a unit
| Suburb | Units Typical Value ($) | Houses Typical Value ($) |
| CAMBERWELL | 798,000 | 2,463,000 |
| ELSTERNWICK | 581,000 | 1,786,000 |
| ELWOOD | 661,000 | 1,977,000 |
| WILLIAMSTOWN | 651,000 | 1,878,000 |
| ST KILDA EAST | 540,000 | 1,511,000 |
| SANDRINGHAM | 759,000 | 2,100,000 |
| MOONEE PONDS | 600,000 | 1,623,000 |
| RICHMOND | 599,000 | 1,607,000 |
| BRUNSWICK | 518,000 | 1,370,000 |
| NORTH MELBOURNE | 564,000 | 1,428,000 |
| ABBOTSFORD | 494,000 | 1,209,000 |
| OAKLEIGH | 531,000 | 1,214,000 |
| BLACKBURN | 650,000 | 1,451,000 |
| PRESTON | 529,000 | 1,177,000 |
| CARNEGIE | 706,000 | 1,563,000 |
Source: SuburbData
Note: median unit prices did not include three-bedroom-plus townhouses
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