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Everybody loves a bargain.  It’s a new year, the sales are in full swing and we’ve all been guilty of buying something we didn’t really need because of that fantastic discount.

That desire to strike a good deal extends to house buying, whether it be tough negotiations during a private sale or competitive bidding at an auction.  But buying a house simply because it’s cheap would be ill-advised. And, unlike those sales purchases which under Australian consumer law can be returned if faulty, once the property is bought and you’ve settled in, it’s legally yours to own.

Despite the publicity Melbourne’s record auction boom and million-dollar suburbs attracted last year, there are bargain houses out there.  This includes suburbs that are yet to reach their previous peak price, and also suburbs that are more affordable.

For buyers, it’s a matter of knowing where to look – and that means solid research.  After all, if the quote is low there are reasons for that, and it is important to understand those reasons before buying.

For those on a tight budget good places to start bargain hunting are Melbourne’s most affordable suburbs.  These are the suburbs with the city’s lowest median sales prices and every three months REIV analyses sales figures to determine the 10 most affordable.  It is useful to look back over the year and see which suburbs were consistently on this list – many of them are in Melbourne’s outer suburbs.

Longer term, as Melbourne’s population and demand for houses increases and medium density adds to the attractiveness of outer suburban homes with large yards, these properties will increase in price and prove to have been good buys.

For example, consider Sunshine: once regarded as a less attractive suburb, Sunshine is now sought-after by families priced out of inner west suburbs such as Yarraville and Footscray.  Undergoing urban regeneration, Sunshine’s median price is now more than $500,000 and those who bought there a few years ago can pat themselves on the back and say: I got a bargain.

Information courtesy of the REIV

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