Around $800k

This kind of money will get you a house on a good-sized piece of land in one of the better locations – perhaps with a decent coffee just around the corner

Outside Sydney, $800,000 puts you well and truly in the buying range of some of the better locations in most capitals. In the case of our short list, the Melbourne offerings are out wider but the land portions are sizeable compared with how tightly they carve up land these days in many new estates. Our regional city selection can even put you in a chic downtown area of Newcastle.

Diamond Creek, Victoria 3089 – houses

Prices in Diamond Creek – about an hour’s drive northeast of the Melbourne CBD – have been climbing towards $800,000 for the past few years but still have room to go higher.

The Location-Score for June was 77. It’s been up in the mid to high 70s for the past couple of years. It appears to be somewhat quarantined from the cooling in the broader Melbourne market.

The online search interest at the end of June was 169, which is more than double the national average.

The proportion of renters to owner-occupiers is only 10% – a tenant-sparse suburb. Investors won’t have many other landlords to compete with. Combined with a vacancy rate under 1%, this should be a hassle-free investment.

Yallambie, Victoria 3085 – houses

About 45 minutes’ drive north-east of the Melbourne CBD, Yallambie has house prices tipping in at over $800,000. There has been good growth during the Melbourne boom. But according to the Location-Score, there is more to come.

The Location-Score for June was 77. It’s been a little volatile for this market over the past few years, oscillating between the mid 50s and low 70s.

Yallambie’s metric of note is the percentage of stock on market. At the end of June it was sitting at only 0.33%. This is about four times smaller than the national average at the same time.

Another great metric is the discounting of only a little more than 1%. Sellers are in no way desperate.

One concerning statistic for investors is the yield, which was only 3% at the end of June. There’s nothing alarming about this but it is going to make it just a bit harder for investors to service a mortgage and they will be more dependent than ever on good growth.

The auction clearance rate is pretty healthy too at 78%. It has been above 70% since almost the start of the Melbourne boom.

Hamilton, NSW 2303 – houses

House prices in this central suburb in Newcastle are just under $800,000. They’ve risen sharply in the past 18 months from around $600,000, so you might be thinking it’s had its run.

But the Location-Score for June was 76. This is just under the “excellent” range and is the highest the score has been in the past three years, so growth appears to be unabated for now.

Discounting from the original asking price is at zero. That means the offers above the asking price match with those under. There must be some pretty happy sellers at the moment.

The percentage of stock on market is pretty tight too, sitting at just 0.34%. The vacancy rate is under 0.5%, its lowest point in three years.

One thing to watch, though: the proportion of renters to owner-occupiers is quite high at 46%. Our benchmark is to have less than a third of all residents as tenants. But in this market it’s nearly 50-50. Investors may need to choose streets carefully. Definitely get a good property manager to help find a reliable tenant.