Cheltenham VIC Property Investment

THE MARKET

Cheltenham recorded 4.2% annual price growth over the past 5 years — a $1,300,000 house bought in 2019 would be worth approximately $1,058,290 today. Properties are sitting on the market for 26 days (sellers have the leverage).

- **Median house:** $1,300,000 | **Units:** $391,397 - **Gross yield:** 2.9% | **Net yield:** 1.4% - **Vacancy:** 0.9% (improving) | **Rental demand:** Very High - **5yr price growth:** 4.2%/yr | **3yr forecast:** 4.8%/yr - **Days on market:** 26 (stable)

STR potential: $175/night at 66% occupancy = ~$42,158/yr gross. That's a **11% premium** over long-term rent — but factor in higher management costs and council rules.

BULL CASE

If Cheltenham maintains 3%+ annual growth and vacancy stays below 0.8%, median prices could reach $1,495,000 within 3 years with yields compressing slightly as capital values rise.

Notable infrastructure: **Suburban Rail Loop East - Cheltenham Station** (under construction). Plus 3 more projects in the pipeline.

BEAR CASE

A market correction or interest rate shock could see prices in Cheltenham pull back 10-15% from $1,300,000, with vacancy rising to 1.6% and rental yields softening as tenants gain leverage.

WHAT TO DO

Cheltenham presents a compelling investment opportunity. The combination of solid fundamentals and very high rental demand supports entry at current price levels. Proceed with due diligence on specific properties. Target gross yields above 2.9% and prioritise properties with value-add potential. Consider timing entry around the current growth phase of the market cycle.

- Entry range: $1,170,000 – $1,430,000 - Minimum yield to target: 4.5% - Watch signal: vacancy staying below 2% and days on market holding under 35

This analysis is for informational purposes only and does not constitute financial, legal, or investment advice. Seek professional advice before making investment decisions.