Melbourne South Eastern suburbs tipped for 9.3% annual capital growth: HTW residential

Melbourne’s outer south-eastern suburbs continue to prove to be a popular region amongst buyers, according to the latest Herron Todd White (HTW) residential report. 

It's particularly the case for newly settled migrant families, young couples and first home buyers who are taking advantage of the affordable land prices in areas of the Casey and Cardinia districts.

The valuation firm took a look at rental yield across the country to dissect where to find the best returns in their residential markets.

The report suggests there are many estates to choose from in these fast-developing areas.

"House and land packages are attractive for first home buyers and young families as they allow flexibility in designing their own home to cater to their individual needs," the valuation firm said. 

In the ever-expanding Cardinia Shire municipality, the median house price is $552,385 and $396,469 for a unit respectively, according to Corelogic.

In recent years, Pakenham has become a major growth area for the outer south-eastern suburbs of Melbourne appealing to young families with its proximity to parks, shopping retail outlets, schools and child care centres.

In the suburb of Pakenham, statistics show that houses are priced at an average of $485,000, generating a weekly rent of $360 per week, yielding at a rate of 3.5% to 4%.

The HTW report provides two examples, including a house and a unit. 

A single storey house at 16 Jacaranda Way, Pakenham (pictured below) has recently been sold for $595,000.

Set on a 645 square metre block, the house comprises four bedrooms plus study, two living areas, two bathrooms, double garage and alfresco.

The home is close to Heritage Springs shopping centre, primary school and Hippity Hop Child Care centre.

A three bedroom unit at 2/16-20 Honeysuckle Close, Pakenham (pictured below) has been sold for $437,000.

The 174 square metre home comprises three bedrooms, two bathrooms, outdoor entertaining area and single car space. 

Overlooking parkland, the unit is within walking distance from the lakeside shops.

"Whilst the rental yields in the outer south-eastern suburbs may not be as high as properties in the CBD and inner suburbs, homeowners and investors can experience an average annual capital growth of 9.3% a year for houses and 14.49% for units in these growth corridor areas," the valuation firm said, 

"This just shows that different investors have different strategies when it comes to investing in property and it all comes down to the individual’s end goal as some may look for properties that generate high yields and others look for higher capital growth."