Red Hill VIC Property Investment

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## 2. Market Overview - Median house price: $1,597,809 - Median unit price: $721,158 - 5‑year CAGR: 5.4 % pa – shows solid long‑term appreciation. - 3‑year growth forecast: 4.9 % pa – suggests the upward trend will continue. - Days on market: N/A – no data, so we cannot gauge current seller urgency.

Signal: With price growth well above inflation and a strong scorecard, buyers can expect modest capital gains while sellers benefit from a desirable, high‑priced market. The lack of days‑on‑market data means we should watch for any sudden shifts in listing speed.

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## 3. Rental Market - Median weekly rent: $850 - Gross rental yield: 2.8 % - Vacancy rate: N/A - Demand rating: N/A

Interpretation: A 2.8 % gross yield is modest but typical for inner‑city Melbourne suburbs. Without vacancy data we cannot quantify rental risk, but the rent level indicates steady demand for both houses and units.

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## 4. Short‑Term Rental Opportunity - STR nightly rate: N/A - STR occupancy: N/A - Estimated annual STR revenue: N/A

Conclusion: Because no STR metrics are supplied, we cannot model short‑term returns. With a solid long‑term yield of 2.8 %, the default strategy leans toward Long‑Term Rental (LTR) until STR data becomes available.

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## 5. Infrastructure & Growth Drivers - Known projects / transport / employment base: N/A

Comment: The suburb’s proximity to Melbourne’s CBD (within 5 km) is a built‑in advantage, supporting demand. Investors should monitor council releases for any new transport upgrades or commercial developments that could further boost appeal.

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## 6. Bull Case Assume the 3‑year forecast of 4.9 % pa materialises and rental demand stays stable:

If rent holds at $850 wk, gross yield improves to ≈3.0 % on the higher price, enhancing cash flow while delivering ~15 % total return (capital + rent) over three years.

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## 7. Risks | Risk | Quantified Concern | |------|--------------------| | Rate sensitivity | Yield of 2.8 % leaves little margin if borrowing costs rise; a 1 % rate increase could cut net cash flow by ~0.5 % of purchase price. | | Vacancy risk | Vacancy data missing – an unexpected rise above 5 % would erode the modest yield. | | Supply pipeline | No data on upcoming developments; a surge in new units could pressure prices and rents. | | Single‑employer dependency | No employment data – if the suburb relies heavily on a few large employers, any downsizing could affect demand. |

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## 8. The Play - Entry range: Target purchases around $1.5 m–$1.6 m for houses and $700 k–$750 k for units (slightly below median to build a buffer). - Minimum yield to target: Aim for ≥ 3.0 % gross (i.e., negotiate rent above $850 wk or purchase below median). - Watch signals: 1. Interest‑rate announcements (look for rate stability). 2. Council releases on new housing or transport projects. 3. Changes in vacancy data from the ABS or CoreLogic. - Recommended strategy: Acquire a property at a modest discount, hold for 3–5 years, and focus on long‑term rental income while monitoring for any STR opportunities that may arise. The strong scorecard and 5‑year CAGR support a capital‑growth‑oriented buy‑and‑hold approach.