MELBOURNE'S hottest real estate prospects for 2014 will be Berwick, Dandenong, Epping, Frankston and Sunshine, a new report has claimed.
The auction frenzy that marked 2013 will ease as buyers eye more affordable suburbs, property guru Terry Ryder said.
Improvements to infrastructure, employment opportunities and an increasing population mean the cheaper suburbs should outpace the rest of the market in the coming months.
"Our numbers show that long term, the best capital growth is in the more affordable brackets," Mr Ryder said.
"This year has been very much on the auction frenzy, and I thinks the market next year is going to be a little bit more rational and about growth in the middle and outer ring suburbs."
But while there will be good buys on middle and outer Melbourne, you will have to look further afield for the best investment opportunities, according to Mr Ryder.
"To get an investment property that pays for itself you really need to look at places like Bendigo and Ballarat where there are houses with rental returns of 6 or 7 per cent, and you can borrow at about 5 per cent," he said.
Here are the five Melbourne suburbs to watch.
BERWICK
RP Data has the median price for houses in Berwick at $450,000.
And the suburb has been named thanks to its growing population, strong education offerings, new hospital development and the upgrade for the Monash Freeway.
Mr Ryder also identified it as one of Melbourne's steadiest markets with annual growth rarely dipping below five per cent - and prices also performed well in 2011 and 2012 when most Melbourne suburbs suffered.
"There's a huge pool of demand for rental properties in the area and it's an area with relative affordability and should appeal to home buyers and investors," Mr Ryder said.
On offer:
13 Tyrell Place, Berwick - $460,000-plus - four-bedroom house
13 Tyrell Place, Berwick. Source: Supplied
DANDENONG
Nearby Dandenong's improvements in business and industry prospects in recent years, as well as those to local retail hubs, underpin its prospects for future growth, according to Mr Ryder.
"Dandenong has done very well for capital growth in the past and it's got good transport and affordability," he said.
"It doesn't have a great image, but it does have the fundamentals that make a good investment."
The suburbs median price for a house is an affordable $385,000 according to RP Data's latest median prices.
On offer:
7 Sarona St, Dandenong - $380,000-plus - three-bedroom house
7 Sarona St, Dandenong.
EPPING
Epping and Craigieburn have also been included on the list thanks to a range of additions to local employment opportunities including the relocation of Melbourne's biggest fruit market to the area. Epping is the more expensive of the pair by $5,000 with a median price tag of $350,000.
Improvements to road infrastructure and railway access have also helped improve the suburbs' prospects.
"A lot of logistics businesses have moved out there and that's brought a lot of jobs into the area," Mr Ryder said.
Harcourts Epping director Tony Lombardi agreed with Mr Ryders assessment and added that consistent expansions of the Northern hospital.
"I would say the (infrastructure) growth will increase the number of people wanting to live in Epping and demand will increase house prices," he said.
On offer:
63 Lyndarum Drive, Epping - $369,000 - three-bedroom house
63 Lyndarum Drive, Epping. Source: Supplied
FRANKSTON
Frankston's affordable property prices, with the median at $340,000 according to RP Data stats, have made it popular with first homebuyers. It is also benefiting from its position on the bay, and an uptick in commercial development in the area has it poised to perform well.
"It's affordable bayside, it's been nominated by the state government as a development centre for the south east of Melbourne and the foreshore amenity has been improved immensely," Mr Ryder said.
On offer:
75 Orwill St, Frankston - $335,000-$360,000 - four-bedroom house
75 Orwill St, Frankston.
SUNSHINE
With prices still hovering at the $400,000 mark for a median house in Sunshine, it is still to see the full benefit of government plans to improve the areas railway hub. It's also a strong candidate for steady growth thanks to government plans to build a regional rail network hub in the suburb.
"That's going to be huge for Sunshine," Mr Ryder said.
Terry Fitzpatrick, from Jas Stephens real estate, added that the suburb is also benefiting from the ripple effect as buyers are priced out of nearby Yarraville and Footscray.
"California bungalows are really popular because that's what people are (looking for) in Yarraville and Kensington," Mr Fitzpatrick said.
On offer:
3 Merlow St, Sunshine - $380,000-$410,000 - four-bedroom house.
For more property tips to help you in 2014, check out this Saturday's Realestate section in your Herald Sun newspaper. And don't forget to grab a copy of the Sunday Herald Sun to see the results from this weekend's Super Saturday, including the sale of Julia Gillard's former Altona home.
3 Merlow St, Sunshine. Source: Supplied
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