My interest in Melbourne stems from having to accommodate a daughter at Melbourne Uni for the next 3-4 years.
I'm open to be talked in to buying rather than renting a 2 – 3 bedroom unit with capital growth prospects over medium term.
As a cash buyer in the market of $400k to $500k, I'm interested in views about whether to buy or rent.
Rent!!..
Melbourne market is under the most downward pressure of any city at the moment and there's nothing on the immediate or near horizon that's likely to change that. Given global economic concerns and increasingly challenging economic environment for Australia and most would agree that investing with the prime reason of housing a family member isn't likely to turn out well.
There is far lower risk for about the same if not better return available to you. Dropping your $500k into a term deposit will net you more per year in the first 5 years than a comparable rental property. No in-going costs or holding costs during that time. (5yr term is around 5.6%) You could pick up around $550/wk on $500k (and still have $500k at the end).
My guess is that you could pay your daughters rent and most of her tuition and probably still come out ahead after 5 years. Your daughter might actually (subject to graduating) end up debt free at the end of it to start a career. I tend to think there's far more value in that strategy than any small gain (delusionally optimistic) you might garner from a property investment.
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