---
title: "We Bought 100 Houses in Melbourne Last Year. Every Single One Is Cash-Flow Positive."
description: "In 2024, our team purchased nearly 100 Melbourne houses with an average annual return of 14%. Here's why 2025 is the year to buy Melbourne — with data."
author: Joey Don
date: 2026-02-19
category: Market Analysis
url: https://premiumrea.com.au/blog/bottom-fishing-melbourne-property-2025-guide
tags: ["Melbourne", "2025", "market bottom", "investment", "cash flow", "southeast Melbourne", "property cycle"]
---

# We Bought 100 Houses in Melbourne Last Year. Every Single One Is Cash-Flow Positive.

*By Joey Don, Co-Founder & CEO at PremiumRea — 2026-02-19*

> While everyone was doom-scrolling about Melbourne's property market, we were buying. Nearly 100 houses in 2024. Average return: 14%. Every single one cash-flow positive after our renovation playbook. The numbers don't lie.

Have you been watching your mates buy property in Perth and Brisbane over the past three years, quietly kicking yourself for not getting on board?

Good. That feeling is useful. Because the same opportunity that existed in Perth in 2021 and Brisbane in 2019 is staring you in the face right now. Except this time it's Melbourne. And this time, you've got no excuse.

In 2024, our team purchased close to 100 houses across Melbourne's southeast and northwest. Average annualised return: approximately 14%. And every single property — not most, not the majority, every single one — is generating positive cash flow after our renovation and leasing playbook was applied [1].

I'm going to show you why, and where.

## The cycle logic: why Melbourne is the trade right now

Australian property markets rotate. This isn't speculation — it's observable pattern.

Perth bottomed in 2019-2020 after a decade of decline. Anyone who bought there at $350K-$400K is now sitting on $550K-$600K. That's a 50-60% gain in four to five years [2].

Brisbane started running in 2020. Properties that were $500K pre-COVID are now $750K-$800K. Same story — early movers cleaned up.

Adelaide followed in 2021-2022. Again, 40-50% gains for people who recognised the cycle turn.

Melbourne? Melbourne has been the laggard. Three years of flat or declining prices while every other capital city ran. Victoria's land tax increases in 2023 spooked investors. Interstate migration turned negative. The narrative became: "Melbourne is finished."

Except the data says otherwise.

Melbourne's median house price, after adjusting for inflation, is now 20-25% cheaper than Sydney [3]. On a price-to-income basis, Melbourne's outer suburbs offer better affordability than Brisbane — which is something that hasn't been true for fifteen years.

Charlie Munger said it best: "Never listen to what people say. Watch what they buy." And right now, Sydney buyer's agents are showing up at Melbourne auctions. I know because I've been bidding against them. They can see what the Reddit commenters can't: Melbourne is priced like Brisbane was five years ago, and the structural tailwinds are lining up [4].

## Where the growth is actually happening

Melbourne's growth isn't uniform. Some suburbs are still going sideways. Others are already running. The difference comes down to one word: affordability.

The average Australian family earns about $130,000 in Melbourne. The healthy debt-to-income ratio for a mortgage is 7-8 times annual income. That puts the target purchase price at $700,000-$800,000 [5].

Now look at where you can buy a three-or four-bedroom house on 500+ square metres of land for that price:

**Far southeast:** Cranbourne ($650K-$700K), Hampton Park ($650K-$680K), Narre Warren ($700K-$750K), Berwick ($750K-$800K). These suburbs have Fountain Gate (Australia's second-largest shopping centre), train access, the Monash Freeway, and strong hospital infrastructure. Population is booming — 30-40 year old families with stable incomes.

**Northwest:** St Albans ($650K-$700K), Sunshine ($680K-$730K), Deer Park ($600K-$650K), Epping ($650K-$700K). Costco has moved in, commercial development is accelerating, and these suburbs are within 30 minutes of the CBD by train. The northwest was the fastest-rebounding zone in Melbourne over the past six months [6].

**Outer east:** Boronia ($700K-$750K), Croydon ($720K-$780K), Bayswater ($700K-$760K). White Australian downsizer territory — older couples selling their 800-square-metre blocks to developers. Excellent for land banking and future subdivision.

The common thread: all beyond 20km from the CBD. All with limited new land supply (these are established suburbs, not greenfield developments). All attracting middle-income families who buy and hold rather than speculate.

"We put it in writing — in the contract — that we'll buy 500-plus square metres of land and deliver 6% rental yield," says Joey Don. "Find me another buyer's agent in Australia who'll put that on paper. We do it because the numbers in these suburbs actually support it."

## The rental advantage most people miss

The common objection to Melbourne investment is: "But the rental yields are only 3%."

Correct. Melbourne's average rental yield for a standalone house is about 3.2% [7]. If you buy a house and rent it as-is, you'll be underwater at current interest rates. You'll be feeding the property $200-$400 per week out of your own pocket.

That's the average. We don't operate at the average.

Our playbook adds a second income stream to every property we buy. Three methods:

1. **Granny flat addition.** 30sqm costs $110K + GST. Adds $370-$390/week in rent. Pushes yield from 3.5% to 5.5-6% [8].

2. **Internal conversion (dual key/rooming house style).** Spend $65K-$100K in cash on internal modifications — adding a kitchen, bathroom, and separate entrance. Pushes total rent to $1,000-$1,200/week. Yield jumps to 6-8%. But note: bank treats this as commercial, not residential [9].

3. **Light cosmetic reno.** Spend $10K-$15K on paint, flooring, and compliance items. Won't change the yield dramatically (maybe 3.5% to 4.2%), but gets the property tenanted fast and positions it for a granny flat or conversion later.

Method 1 is our bread and butter. We write it into the contract: 500sqm+ land, 6% yield target. It works because the construction economics work — $110K build generating $19,000+/year in rent is an 18% return on the granny flat investment alone. That kind of return doesn't exist in any other asset class at this risk level.

## Population return: the tailwind nobody is pricing in

For three years, Victoria lost population to other states. People couldn't handle the land tax increases, the lockdown hangover, the negative sentiment. They packed up and moved to Brisbane, Perth, Adelaide.

But in 2024, interstate migration turned. People started coming back [10].

Why? Because Brisbane got expensive. Perth got expensive. Adelaide got expensive. The very cities people fled to have now caught up to — or exceeded — Melbourne on a price-per-square-metre basis.

A nurse earning $90K who moved to Brisbane in 2022 for "better affordability" is now looking at Brisbane house prices that match Melbourne. Except Brisbane doesn't have Melbourne's job market, Melbourne's healthcare system, or Melbourne's education infrastructure.

They're coming home. And they're buying in the outer ring because that's where the value is.

This is the tailwind that the bears aren't pricing in. Melbourne's population engine is restarting, but prices haven't caught up yet. It's a gap. And gaps in property markets get closed — usually faster than people expect.

## The question you need to answer

I won't pretend to know exactly when Melbourne reaches the growth pace that Perth and Brisbane hit. Could be six months. Could be eighteen.

What I do know is that the 70-80 thousand dollar houses in Melbourne's far southeast are going up by $5,000-$7,000 per month right now. That's observable, measurable, and consistent since February 2025 [11].

If you wait six months, you pay $30K-$42K more for the same house. If you wait twelve months, you might pay $60K-$84K more. At some point, the window that exists today — where you can buy a 600-square-metre block with a house for $700K, add a granny flat, and hit 6% yield — will close.

I can't force anyone to act. But I can show you the data. Melbourne is where Brisbane was in 2019. KPMG and multiple institutional forecasters have Melbourne's house prices leading national growth through 2026 [12].

The same people who said "I should have bought Brisbane in 2019" will be saying "I should have bought Melbourne in 2025" in three years.

Whether you become one of those people is entirely up to you.

## References

1. [PremiumRea portfolio performance data, FY2024. ~100 Melbourne house purchases, average annual return 14%, 100% positive cash flow post-renovation.](#)
2. [CoreLogic, 'Perth Property Market Performance 2019-2024'. Median house price growth.](https://www.corelogic.com.au/)
3. [Domain, 'House Price Report — March Quarter 2025'. Melbourne vs Sydney median comparison.](https://www.domain.com.au/research/house-price-report/)
4. [KPMG, 'Australian Residential Property Market Outlook 2025-2026'. Melbourne forecast to lead capital city growth.](https://home.kpmg/au/en/home.html)
5. [Australian Bureau of Statistics, 'Average Weekly Earnings, Australia', November 2024. Cat. No. 6302.0.](https://www.abs.gov.au/statistics/labour/earnings-and-working-conditions/average-weekly-earnings-australia)
6. [CoreLogic, 'Melbourne Suburb-Level Performance Analysis', Q1-Q2 2025. Northwest Melbourne rebound data.](https://www.corelogic.com.au/news-research)
7. [CoreLogic, 'Quarterly Rental Review', March 2025. Melbourne houses gross yield: 3.2%.](https://www.corelogic.com.au/)
8. [PremiumRea granny flat pricing. 30sqm: $110K + GST, expected rent $370-$390/wk.](#)
9. [PremiumRea portfolio data. Rooming house conversions: $65K-$100K cost, $1,000-$1,200/wk combined rent, bank-classified as commercial.](#)
10. [Australian Bureau of Statistics, 'Regional Internal Migration Estimates', December 2024. Victoria interstate return migration turned positive.](https://www.abs.gov.au/statistics/people/population/regional-internal-migration-estimates-provisional)
11. [PremiumRea transaction data. Southeast Melbourne monthly price appreciation: $5,000-$7,000, Jan-Jun 2025.](#)
12. [KPMG Economics, 'Melbourne Property Forecast 2026'. Institutional outlook for capital city growth leadership.](https://home.kpmg/au/en/home.html)

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Source: https://premiumrea.com.au/blog/bottom-fishing-melbourne-property-2025-guide
Publisher: PremiumRea (Optima Real Estate) — Melbourne buyers agent