Best suburbs in Melbourne for capital growth within 20k of CBD

Analysis of changes in the median value of houses in suburbs within 20k of the CBD over the medium term shows some interesting trends.

In order to smooth out some of the volatility present in the short term this analysis focuses on median value growth over a five year period.

The data shows that owners at a range of price points and locations have recorded very healthy increases in value. There are three suburbs with median values in excess of $1 million in the top ten list based on median value growth over the past five years. These three suburbs, Hawthorn East, Middle Park and Ashburton have all recorded a rise in median values of more than 45 per cent over the five years to May 2014.

Hawthorn East tops the list with an increase of 78 per cent over the past 5 years, but is followed by a much more affordable location in second place. Watsonia recorded a 63 per cent rise and with a median house value less than a third of Hawthorn East, this shows good capital growth can be found at a range of price points.

Third on the list is Derrimut, however as a growth suburb underlying values are driven by new home development across the suburb.

Fourth on the list is Pascoe Vale South with a 54 per cent rise. It is a suburb which is undergoing significant change and is seeing values boosted by the good transport options and well-sized blocks.

Other suburbs on the list can be seen below but it is worth highlighting Northcote, as it is representative of the gentrification underway in the inner north of Melbourne.

Table - Best suburbs for capital growth within 20k of CBD

Robert Larocca
RP Data Victoria Housing Market Specialist

About Robert Larocca

Robert Larocca has built a profile over the past eight years as an expert on the Victorian residential property market. He worked for the REIV both directly and as a consultant over 8 years acting as a spokesperson, managing its research department and public policy. He has been a media and government relations consultant and spent a decade working across the three levels of government including as a Councillor and Mayor in the City of Moreland. He has well developed leadership skills in the not for profit sector and has been the Chairperson of CERES Community Environment Park for 9 years.

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