Richmond VIC Property Investment

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## 2. Market Overview - Median house price: $1,400,000 - Median unit price: $640,000 - 1‑year price growth: ‑0.6 % (a slight dip) - 5‑year CAGR: 4.1 % / yr (steady long‑term growth) - 3‑year growth forecast: 5.4 % / yr (future upside) - Days on market: *data not supplied*

Signal: The modest 1‑year decline suggests sellers may be more motivated, while the 4.1 % 5‑year CAGR and 5.4 % 3‑year forecast indicate a resilient market that still favours buyers with a long‑term outlook.

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## 3. Rental Market - Median weekly rent: $855 / wk - Gross rental yield: 3.2 % - Vacancy rate: *data not supplied* - Demand rating: *data not supplied*

What it means: A 3.2 % yield is moderate for inner‑city Richmond. The solid rent level ($855 / wk) supports cash‑flow expectations, but without vacancy or demand data we cannot gauge short‑term rental pressure.

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## 4. Short‑Term Rental Opportunity - STR nightly rate: *data not supplied* - STR occupancy: *data not supplied* - Estimated annual STR revenue: *data not supplied*

Conclusion: With no STR metrics available, we cannot quantify the short‑term rental upside. Given the strong long‑term rental yield (3.2 %), LTR remains the safer default strategy until STR data emerges.

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## 5. Infrastructure & Growth Drivers - Known projects, transport upgrades, employment base: *data not supplied*

Implication: Richmond’s proximity to Melbourne’s CBD (within 5 km) already provides a strong location premium. In the absence of specific project data, the suburb’s historic demand and existing transport links continue to underpin its attractiveness.

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## 6. Bull Case Assume the 3‑year growth forecast of 5.4 % / yr materialises:

• Future median house price (3 yr):

• Future median unit price (3 yr):

If yields stay at 3.2 % and rents rise in line with price growth, investors could see both capital appreciation and modest rent increases, pushing total returns above 7 % / yr.

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## 7. Risks | Risk | Quantified Indicator | Impact | |------|----------------------|--------| | Price dip | 1‑yr growth ‑0.6 % | May erode short‑term equity if buying at peak. | | Yield sensitivity | Gross yield 3.2 % | Low margin; any rise in interest rates could turn cash flow negative. | | Vacancy/ demand unknown | No vacancy or demand data | Uncertainty around rental stability. | | Supply pipeline | No data on new dwellings | If significant new supply materialises, yields could be pressured. | | Rate sensitivity | High median house price ($1.4 m) | Larger loan sizes mean higher exposure to interest‑rate hikes. |

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## 8. The Play - Entry range: Around the median – $1,400,000 for houses or $640,000 for units. - Minimum yield target: ≥ 3.2 % (the current gross yield) to maintain a positive cash flow buffer. - Watch signals: 1. Publication of days‑on‑market data – a drop would signal stronger buyer demand. 2. Interest‑rate movements – any rise that pushes mortgage costs above the 3.2 % yield. 3. New supply announcements – any large development that could lift vacancy. - Recommended strategy: Acquire at or below median price, hold for the medium‑to‑long term, and monitor the above signals. If yields fall below the 3.2 % threshold, consider repositioning (e.g., refinancing or shifting to a higher‑yield asset).

*Overall, Richmond’s strong scorecard, solid long‑term growth trajectory, and respectable rental yield make it a compelling buy for investors comfortable with modest cash‑flow margins and a focus on capital appreciation.*