penegal, any recommended areas etc? or properties that you think represent "good value"?
What about regional victoria perhaps? (continue renting in MEL and invest say in ballarat)
Agree with sub markets comment for Melbourne - I would be very very careful with apartments especially in built up areas like CBD, South Yarra etc. Good quality town houses a little safer but same comment applies - avoid the saturated areas.
Free standing houses are in significant shortage across the coveted inner 10k radius - however there are some suburbs within that ring that are still underdeveloped compared to suburbs the same distance away on the other side of town. For example you would be hard pushed to find value in the south east (South Yarra, Prahran, Windsor to). But same distance in the inner north, north west in areas like Brunswick West, Brunswick and Coburg you will find a significant discount in an area that is rapidly gentrifying.
Careful with the regional centres - they may be more accessible but growth drivers (jobs, population growth etc) can be tepid.
All in all Melbournes population is growing fast and will overtake Sydney I think in the early 2020's with better infrastructure and housing still comparably affordable (I choke as I say this but it's true!)
Sorry for the slow reply. Australian property as a whole does seem 30-35% overpriced, but there are still some good spots. Of course with all the money printing going on, perhaps this bubble will bloat before it bursts. What is clear, is that there is a lot of debt in the game.
Regional property is a slow game (you can buy when
YOU want, but selling can take years and is often not when
YOU want). Whilst there are some pockets of great "value", make sure you know what you are getting into (e.g. you may get stuck with a house for years, or need to take a haircut to offload it quickly, tenancy is harder if the big factory in town closes down). Regional centers are a little safer than one company towns, but they are still are small markets.
Apartments:
There are good and bad apartments / strata. When looking at apartments there are other factors to consider (not just size). Quality / age of build, How common property is maintained, Quality of the owners corp (both in terms of title holders / committee / management), By Laws, Strata levies and financial state of the OC - are levies realistic? Is there a sinking fund? Are they solvent? Any known problems which need to be fixed? Are they funded? etc.
I like St Kilda for apartments, and Brunswick West for semis and townhouses. As always - select your building carefully. In these areas there are some good builds which are still selling at realistic rental yields (which is always a good yardstick). St Kilda still has a bit of a grunge image, but I can see it starting to gentrify again, especially with the 2018 The Block transforming The Gatwick from a den of drugs and crime into some trendy apartments.
South Yarra is expensive, but I do like area. Prahran and Windsor about ~10-15 years ago would have been good, but you have missed the boat, as they are approaching South Yarra price levels now (and the trendy end of Chapel has moved south). Port Melbourne is overpriced. I do like the area, but you have the baby boomer tax there. South Melbourne is a mixed bag. Fitzroy and Collingwood are okay, but they don't have the same stock levels which has kept prices solid. Again, still a bit of grunge.
Southbank, CBD, Docklands are generally quite bad, with the exception of one or two good buildings. There is just too much stock, and too much low quality stock.
St Kilda Road / Domain - I have recently found out that the Metro Tunnel will remove all the trees along St Kilda Road and dig a giant hole to build the tunnel. There will be tram re-routes, and all sorts of inconvenience. Avoid for now, but you may get some bargains in the coming years as people bail out of those buildings with "construction views". Once the tunnel is built, it will probably be a great place to live (and very well connected).
Detached houses:
The 10km (12/14/16km) radius is a good yardstick of CBD proximity, but there are very few good suburbs with attractive prices. I agree that the north and west are the best "value" propositions. Strathmore and Oak Park are good, but they have seen some very keen rises over the past 5 years. You might have missed the boat for them. Certainly Coburg is worth a look.
In the east, you do need to go further afield. I think Forest Hill is hugely underratted. You can get in under $1M, but nearby areas are seeing prices well over that, but there isn't any obvious reason. Otherwise the areas to the East of Ringwood on the rail corridors are attractive. Heathmont has gone gangbusters for the last 5 years. I was remiss not to buy a shack on a big block 600m from the train station a few years ago. Areas like Belgrave Heights, and some of those suburbs are looking attractive given the big block sizes, and so well connected to transport. With the Myki fare changes it costs you no more to travel to the city on PT (just more time).
As always, it depends on your personal circumstances, whether you want to live there or use it as an investment. Your primary place of residence has all sorts of intangible things to consider. Proximity to family, friends & work, ambiance of the area, size of the home, room to grow or downsize, ability to stay for a long time without moving or inspections (e.g. buy over rent), car garaging, proximity to other amenities (sports, shopping, recreation); etc.
