As Melbourne’s property market stirs after a subdued couple of years, buyers and investors are re-examining their options in anticipation of renewed growth over the next 18 to 24 months.
While single-fronted cottages and boutique apartments in the inner suburbs have long been the go-to for investors, villa units are a property type that’s quietly gaining traction for its blend of affordability, scarcity, and broad appeal.
Why villa units are back in focus
Whenever I advise clients on investment strategy, I return to three fundamentals: underlying land value, scarcity, and multifaceted demand.
Single-fronted cottages or terrace houses in the inner city still tick all these boxes, offering strong land content, rarity, and broad buyer and renter appeal.
However, with entry prices now typically north of $1 million – and likely to keep rising – these properties are out of reach for many.
Older, boutique apartments within 10 kilometres of the CBD are a more accessible alternative, but have a smaller land component as a proportion of the overall value.
So what’s left for buyers willing to consider something different, perhaps a little further out?
Villa unit advantages
Villa units, typically built in Melbourne’s middle and outer ring suburbs, are emerging as a compelling alternative.
They offer:
- Strong land value: Often undercapitalised sites with generous land proportions.
- Scarcity: No new villa units are being built – developers can’t make the numbers work compared to higher-density townhouses, so existing stock is finite.
- Multifaceted demand: These properties appeal to a wide range of buyers – first home buyers, investors, and downsizers looking for a convenient town base.
Unlike larger houses in these suburbs, which tend to suit families and owner-occupiers and command higher prices, villa units are more affordable and offer a similar internal space to many cottages (typically two bedrooms and one bathroom).
They also often include a lock-up garage – a rarity among older cottages, which usually rely on street parking.
What to look for in a villa unit
Not all villa units are created equal. Here’s what I advise clients to consider when selecting one:
- Location: Prioritise proximity to public transport and local shopping villages. In Melbourne’s expanding suburbs, distance from these amenities can quickly become a drawback, especially for renters who want convenience.
- Floor plan: Look for layouts that feel like a small house – an entry hall, bedrooms off a corridor, and separate kitchen and living areas. This not only improves livability but also opens up renovation potential, such as creating open-plan living.
- Car parking: A single or double garage is ideal; a carport is acceptable, but avoid tandem parking arrangements along the driveway, which often signal a more basic build.
- Outdoor space: Seek a courtyard large enough for a table, chairs, and a barbecue – ideally with enough room for a pet. Always check that the outdoor area is on title, not just common property.
- Development size: Smaller is better. Aim for blocks of two to four units, up to six at most. Larger developments can dilute demand and enjoyment.
- Position within the block: Front and rear units are usually most desirable for privacy and outlook, but some middle units can work with the right layout and aspect.
Bluechip suburb affordability
One of the unique strengths of villa units is their availability across a wider geographic area than inner-city cottages or apartments.
In blue-chip locations like Boroondara, suburbs such as Camberwell, Glen Iris, and Surrey Hills, offer quality villa units typically within a price range of $800,000 to $1 million or more.
Move further out, and you’ll find solid options from $600,000 to $800,000 – provided you remain mindful of access to services and transport.
ON GROUND CASE STUDY
A sound investment, not just a grandma’s house
Villa units have sometimes been dismissed as ‘grandma’s house’ – dated and uninspiring. But that’s changing rapidly.
A few years ago, I worked with a first home buyer who wanted an investment-grade property, but was initially hesitant about villa units.
After weighing up the benefits and seeing several options, she purchased a two-bedroom rear villa in Surrey Hills, close to Union Road and local shops.
The property was in original condition, which was perfect for her, as she had a trade background and wanted to add value through renovation.
Purchased in the low $700,000s, the villa is now worth well into the $800,000s after a full renovation – delivering both capital growth and a lifestyle she didn’t have to compromise on.
Take Home Message
Villa units are no longer just ‘grandma’s house’ – they can be a smart, versatile stepping stone for both investors and first home buyers seeking growth, affordability, and lifestyle.
As Melbourne’s market evolves, those willing to look beyond the obvious may find villa units offer the perfect blend of value, scarcity, and potential for the years ahead.
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