Victoria Property Report

Melbourne was announced as the most liveable city in the world in 2022 – who wouldn’t want to live there? It’s the perfect home for foreign investors and returning expats alike. With 6.74 million residents, Victoria is Australia’s second most populated state.

It’s home to dramatic mountains, far-reaching national parks, abundant wineries, and thrilling surfing beaches – Victoria is a diverse and attractive place to live. Property prices in Melbourne and Victoria have strong growth potential. Melbourne property prices have increased by 5.2% in the last ten years.

And, despite local asking prices plateauing and declining, Melbourne CBD offers expat investors and owner occupiers an excellent opportunity. In fact, in the next ten years, Melbourne will likely overtake Sydney as Australia’s largest capital city. Now is the right time to purchase property in Victoria.

Whether you’re looking for a property in Victoria to enjoy the glorious sun or the artistic culture of Melbourne, we can help you organise your expat home loan and purchase your dream home.

Victoria Property Report

Top Property Locations

Unlike many Australian cities, Melbourne house prices suffered dramatically during the coronavirus pandemic. However, the market has surged in the last year and offers a substantial investment opportunity to potential buyers. Overseas Australian residents wishing to purchase property in Victoria might consider these top property locations.

Caulfield

Median property price: $1,829,000

Caulfield has a relatively small population (just under 6,000 people), primarily home to residents aged 60 and over. If you’re looking to enjoy retirement back in Australia, consider the well-regarded suburb of Caulfield. The neighbourhood has a relatively diverse population, with expats and foreign residents from South Africa, Israel, China, India, and England.

It sits about 10km southeast of Melbourne CBD and has an excellent tram and train network. Surrounding Caulfield, you’ll find the neighbouring gentrified suburbs of Carnegie and GlenHuntly, which make excellent investment opportunities. The average monthly mortgage repayments for residents in Caulfield is $2,500.

Elsternwick

Median property price: $2,150,000

Elsternwick is a highly sought-after suburb in Victoria, just 9km from Melbourne’s CBD. With quality schools, beaches, and amenities, Elsternwick is very popular among families and has a relatively young population aged 20-39. Moreover, the suburb is home to numerous cafés, restaurants, and bars, as well as one of Melbourne’s oldest cinemas.

House prices have grown 6.4% in the last 12 months, with a compound growth rate of 6.4% for houses and 3.9% for units. The average monthly mortgage repayments are $2,167.

Ormond

Median property price: $1,850,000

Ormond has a significant owner-occupier population, with 59% of the suburb’s properties owned by its inhabitants. With many cafes, shops, supermarkets nearby, excellent schools, and great public transport connections, Ormond is an ideal place to live. The average age is between 20-39. The average monthly mortgage repayments are $2,167.

Houses in Ormond have a compound growth rate of 6.2%, based on the last five years of property sales.

Victoria Property Report

Average Property Price

The property asking prices in Victoria has grown steadily over the last decade. Like many Australian homes, prices steeply shot up in the previous few years. Yet, in recent months, property prices in Melbourne have stabilised and lowered. However, as prices go down, the number of listings available has grown.

Average House Price

The average house price is $1,156,019 in Melbourne – while three-bedroom homes are worth about $1,069,916. All houses have increased by a compound growth rate of 6.4% in the last ten years, when properties cost about $618,938. If you’re looking to enter the Melbourne housing market, now is the right time. House prices are relatively stable, with solid growth potential.

Speak to our team for expert advice about your home loan options to secure your Melbourne property.

Average Unit Price

Unit prices have seen steady growth in the last ten years but remain far more stable than house prices. You could buy a unit for $586,715 in Melbourne – only about $100,000 more than they cost a decade ago. You can trust unit prices to continue growing, with a compound growth rate of 3.5% over ten years.

If you’re considering investing in a Melbourne unit, let us help you compare home loans and lenders.

Average Apartment Price

The average two-bed apartment price is currently $587,116. Since 2012, apartment prices have increased 3.4% by approximately $167,635 – showing steady growth. Melbourne apartments make excellent opportunities for investors, first home buyers, or expats returning to Australia.

We can help you organise the right loan with reasonable interest rates to secure an apartment in Melbourne.

Victoria Property Report

Average Number of Properties Sold per Month

In Melbourne’s CBD, around four houses sell per month. Fourteen properties sold in the last year. There are far more units available in central Melbourne, with over 100 on the market each month. Units are typically available for 60 – 70 days before selling, with over 12,000 interested buyers.

If you’re looking for a less competitive suburb in Victoria, you might consider Carlton North -which has around 80 – 90 houses for sale each year. Melbourne is a housing hot spot. If you’re eager to purchase a house or unit in Victoria’s capital, start looking at your options sooner rather than later.

Stamp Duty Costs in Victoria

Stamp duty is a type of tax you pay based on the value of your property. For most Australian residents, stamp duty in Victoria ranges between 1.4% and 6.5%.

  • Property valued between $0 – $25,000: 1.4%
  • Property valued between $25,000 – $130,000: $350 plus 2.4% of the excess above $25,000
  • Property valued between $130,000 – $960,000: $2,870 plus 6% of the excess above $130,000
  • Property valued between $960,000 – $2,000,000: 5.5% of the value
  • Property valued above $2,000,000: $110,000 plus 6.5% of the excess above $2,000,000

The average property price in Melbourne ($1,156,019) would cost $63,581 in stamp duty fees.

Moreover, foreign buyers (note: this doesn’t include Australian residents living abroad) must pay an 8% stamp duty surcharge in Victoria. If you’re an Australian expat or permanent resident buying with a foreign spouse, you may wish to consider the impact of the 8% surcharge.

Other Property Costs in Victoria

  • Deposit: 20 – 30% of the purchase price. The higher your mortgage deposit, the better your home loan terms.
  • Valuer Fee: Between $300 and $600. Rural properties in Victoria might cost more to value.
  • Conveyancing and Legal Fees: Between $600 to $2,000.
  • Lender Fees: Between $150 to $1,000.
  • Building Inspection Fee: Between $300 to $600.
  • Pest Inspection Fee: Between $300 to $600.
  • LMI: Depends on your loan-to-value ratio. LMI could cost over $10,000 on a home loan of $500,000.
  • Mortgage Registration Fee: $123.50
  • Transfer Fee: $86.50 plus $2.34 for every $1000 of the property purchase price. The maximum fee is $3,609.

FIRB Application Fees – if you’re not an Australian citizen or permanent resident: Between $4,000 and $237,600, depending on the property value.

Victoria Property Report

Loan Options

Australian expats and permanent residents living abroad can apply for all the same home loan options as citizens residing in Oz. You are eligible for variable, fixed-rate, or interest-only home loans. Equally, you can apply for a maximum home loan of 30 years with an LVR of up to 95%.

Aussie expats can negotiate additional loan features, such as an offset account, redraw facilities, and competitive interest rates.

The biggest challenge you will face applying for a mortgage in Victoria is how lenders view your foreign currency earnings. If your savings and income are not in Australian dollars, this may affect your borrowing power with some lenders. Speak to a mortgage broker in Melbourne for expert guidance about the available loan products and specialist lenders.

We’ll explain your finance options, explaining the interest and comparison rate to help you find the best product.

Pros and Cons of Buying in Victoria

Victoria is the second smallest state in Australia but with the second highest population. Properties are highly sought after. While this ensures buying a property in Victoria is an excellent investment, property prices are typically higher than elsewhere in Australia.

The advantage of purchasing a property in Victoria is that homes and units have strong growth potential. While central properties are costly, there are plenty of highly affordable Melbourne suburbs with secure futures.

The disadvantage of purchasing a home in Victoria is that many cannot afford to buy in the place they want to live. Central Melbourne properties average over a million dollars. Many home buyers have to purchase a cheaper property in an up-and-coming area and rent in the place they wish to live – known as rentvesting.

Purchasing property in Victoria is expensive. However, with the right loan and research into local neighbourhoods, you could snap up an excellent investment opportunity.

Key Facts

Do you want to know about living in Victoria? The state is the second smallest in Australia, at the southeast end of the country, but with a significant population. Often called the ‘Garden State, it’s well-known for its beautiful national parks and lavish wineries. The infamous Great Ocean Road follows the coast west between the Victorian cities of Torquay and Allansford.

Victoria is a diverse state with people speaking various languages, from Mandarin, Italian, and Greek, to Vietnamese and Arabic. If you want to move to Australia from overseas, speak to one of our expert mortgage brokers for financing advice.

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