Why Sydney investors are flocking to this one Melbourne suburb

Sydney investors have been eyeing up one of Melbourne’s last affordable property suburbs, and here’s why.

Melton is located around 35 kilometers west from Melbourne’s CBD, and is increasingly attracting interest from interstate property buyers.

Affordable property prices and minimal house price growth over the past year are the major attractions to the area.

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Domain Group data shows that Melton’s median house price grew just 0.1 per cent to $265,250 over the 12 months to March 2016.

Local agents have confirmed a spike in interest from Sydney investors looking for value, according to Domain Group.

Some agents claim that there is a strong demographic shift happening in the area, which is seeing people sitting on $500,000-plus homes in the suburb of Sunshine and selling up to buy a house and land package in the Melton area.

Others point out that the number of Sydney investors hunting in the Melton area has doubled over the past six months as they look for established houses near train stations and shopping centres which have better capital growth potential than newer dwellings further out.

Melton Hockingstewart real estate agent Joe Mavrikos told Domain Group the market was flooded with interstate buyers, mainly from Sydney, and some were even buying sites before seeing them.

“The value is crazy. I don’t think it’s going to last that long if everyone catches on,” he said.

However, not all local agents agree that Melton is an investor’s dream.

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But Melbourne buyers’ agent Cate Bakos said she would strongly advise investors to reconsider if they wanted to buy in the suburb because not only is it a long way away but it is surrounded by other areas still offering house and land packages.

“When people have the option to buy their own home, if they have stronger incentives to buy new, they generally will, and as a result, the established houses aren’t necessarily being driven up in value,” she said.

Bakos also believed Melton had limited growth drivers and finite reasons why people with stronger household incomes would choose to live there.