Keysborough VIC Property Investment

## 1. Investment Verdict We rate Keysborough, VIC as a Buy, with the single most important number justifying this verdict being its 3-year growth forecast of 13.5%. This indicates a strong potential for capital appreciation in the medium term.

## 2. Market Overview The median house price in Keysborough is $882,500, while the median unit price is $705,000. Over the past year, house prices have grown by 7.9%, and over the past 5 years, the compound annual growth rate (CAGR) has been 4.9%. The gross rental yield is 4.2%, which is relatively stable. With a high owner-occupier rate of 78%, the market is dominated by homeowners, which can contribute to stability. The rental demand is high, with a vacancy rate of 2.2%, signaling a favorable market for sellers and landlords. However, buyers may face competition due to the high demand.

## 3. Rental Market The rental market in Keysborough is characterized by a low vacancy rate of 2.2% and a median weekly rent of $713. The gross rental yield is 4.2%, which is relatively attractive for investors. The demand rating is high, indicating a strong demand for rental properties. This suggests that investors can expect stable rental income and potentially low vacancy periods. With an unemployment rate of 5.4%, the local economy is relatively stable, supporting the rental market.

## 4. Short-Term Rental Opportunity Unfortunately, the data provided does not include specific information on short-term rental (STR) nightly rates or occupancy rates for Keysborough. Therefore, we cannot accurately assess the STR opportunity in this suburb. However, given the high demand for rental properties and the relatively low vacancy rate, it is possible that short-term rentals could be viable, but more data is needed to make an informed decision.

## 5. Infrastructure & Growth Drivers Keysborough is benefiting from the construction of the Suburban Rail Loop East (Melbourne), which is expected to improve transport links and increase connectivity to other parts of the city. Standard suburban transport access is already available, making the area accessible for residents. The strong population growth, with a current population of 30,018, is likely to attract new development approvals, contributing to a moderate supply pipeline. These infrastructure developments and demographic trends are driving demand for properties in the area.

## 6. Bull Case If conditions hold or improve, the upside scenario for Keysborough is promising. With a 3-year growth forecast of 13.5%, investors could see significant capital appreciation. The high rental demand and low vacancy rate suggest that rental yields could remain stable or even increase, providing a strong income stream for investors. If the Suburban Rail Loop East project is completed as planned, it could further boost property values and rental demand, making Keysborough an even more attractive investment destination.

## 7. Risks Despite the positive outlook, there are some risks to consider. The supply pipeline is moderate, which could lead to an increase in supply and potentially put downward pressure on prices if demand does not keep pace. However, the strong population growth and infrastructure developments are expected to support demand. The unemployment rate of 5.4% is relatively low, but any significant increase in unemployment could impact the rental market and property values. Given the low flood risk and low bushfire risk (source: state planning portal overlay), natural disaster risks are negligible.

## 8. The Play For investors looking to enter the Keysborough market, we recommend targeting properties with a minimum yield of 4.0% to ensure a stable income stream. Given the strong growth forecast, buyers may need to act quickly to secure properties at current prices. Watch signals include the progress of the Suburban Rail Loop East project and any changes in the supply pipeline or rental demand. The recommended strategy is to hold for the medium to long term to capitalize on the expected capital appreciation and stable rental income. Investors should also monitor the local economy and any changes in government policies that could impact the property market.

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