You can still buy something within 10 kilometres of town.

Generally, a budget of $200,000 can pick up an inner-city apartment with good growth potential.

Unrenovated one-bedroom apartments near public transport, and built from the 1960s through to the 1980s, often sell in Alphington, Ascot Vale, Brunswick West or Footscray for about $200,000. However, many flats are on main roads, which could pose a desirability problem if you decide to rent or sell the apartment later, possibly in an oversupplied market.

Angie Zigomanis, from research and forecasting group BIS Shrapnel, says values for land within 10kilometres of the CBD are the highest in Melbourne and expected to appreciate strongly over the medium to long term.

He warns buyers to avoid suburbs where development potential of apartments is great.

“Within the inner-city, this may mean suburbs where there are lots of industrial development sites and builders can add new stock very quickly,” he said. “Ashortage of supply against demand is what keeps values high.”

In the east and south, the typically strong suburbs of Hawthorn, Malvern, St Kilda and Armadale are recommended. Entry-level, one-bedroom apartments close to transport and shops start at about $250,000.

Buying an entry-level apartment with a view to renovating is often a good way to add equity – with its value rising by more than the sum of the renovation. But because of the relatively low initial cost of the property, buyers must be careful not to over-capitalise.

Tipping in the labour yourself (laying floorboards, painting), is the most common way to minimise the personal risk to your hip pocket.

Interest-free arrangements are available for kitchens, bathrooms and floors, should you want to spread the cost over several years, but be sure you can afford it.

Despite their often fantastic addresses, MrZigomanis warns first home buyers against some “studio” apartments.

Studios typically range in size from 20 to 40square metres and often have a combined living room and bedroom. Most one-bedroom apartments are greater than 45square metres and include defined bedroom and living zones.

Studio apartments are harder to finance (some banks can demand deposits of 20%) and they may be hard to sell because there are fewer likely buyers.

Should you plan to keep your property as the first in your investment portfolio, be warned studios are hard to rent. This is particularly true in an oversupplied market when tenants may find they can afford to live in bigger apartments.

Mr Zigomanis says in most cases, first home buyers would be better off saving the extra money needed to buy a one-bedroom apartment , which can be more than $200,000 in inner-city areas.

ABOUT $300,000 TO SPEND?

“Keep saving” is the advice from Domain Property Advocates director David McMillan, who says that it’s very difficult to secure good long-term property stock with capital growth potential for less than $300,000.

He says that regardless of whether a property will be owner-occupied or rented, it is still an investment – and buyers should try to be close to the CBD. If this is not possible, they should consider being near a district centre.

“Transit Cities” as defined in the State Government’s Melbourne2030 policy – and set to undergo substantial private and public investment over the next 20 years – include Box Hill, Epping, Ringwood and Werribee.

“The aspects that make properties harder to buy, make them easier to sell,” says MrMcMillan, who recommends first-time buyers choose properties close to shops, transport, schools and arterial roads.

“It’s important to buy the best-value property that you can in the area you like and always remember, it’s the land that goes up not the building.”

Low-rise buildings where fewer flats share the benefit of rising land values, are expected to increase in price faster than high-density developments.

Mr McMillan says the best-value suburbs in the west include Spotswood and Yarraville where two-bedroom flats are about $300,000. In Spotswood, villa units sell for about $350,000.

Flemington is also on his radar. Previously renovated 1960s and ’70s two-bedroom flats near Racecourse Road shops are about $300,000.

He says buyers with $350,000 to $400,000 should scour Brunswick and Coburg for a small house but he warns buyers to stay within 11/2kilometres of Sydney Road.

In the north, Mr Zigomanis also recommends Thornbury and Preston where two-bedroom flats and villa units can still be found at about $300,000.

In the south, unrenovated three-bedroom houses in the coastal suburbs of Chelsea, Bonbeach and Carrum start at about $350,000. Larger, renovated houses fetch about $400,000.

But Mr McMillan says to avoid Frankston, about 40kilometres from town. “Frankston was great value five years ago but we think it’s had its day,” he says. “The Frankston bypass (a 27-kilometre, $700million freeway running south from Frankston to Mount Martha) will add some value but that is several years away.”

“Generally, we advise people to buy within 30kilometres of the CBD,” he says, adding that petrol prices will spur this trend.

ABOUT $500,000 TO SPEND?

You’re spoiled for choice if you’re a prospective first home buyer, couple, or partnership with a budget of half a million dollars.

Safe, long-term property investments including apartments, townhouses – and homes on land – are available, with the choice dependent on the lifestyle you want.

Mr McMillan recommends such buyers check out Ashwood, Burwood, Camberwell, Hawthorn, South Yarra and Surrey Hills. “These areas have historical long-term growth, good transport, plenty of shops, schools and job opportunities.”

A budget of $500,000 picks up well-located, “high character” apartments in Camberwell, Hawthorn and South Yarra and villa units, typically of two or three bedrooms, in Ashwood, Burwood and Surrey Hills.

In the south, buyers who ruled out Bentleigh and Moorabbin as unaffordable last year should take another look. MrMcMillan says these have “come off” their frenzied peaks.

Also a fan of the bayside suburbs is demographer Bernard Salt, who says an increasing number of Melburnians have elected to live close to the water over the past property cycle. He expects suburbs such as Cheltenham, Mentone, Braeside, Aspendale and Edithvale to continue to appeal to first and second home owners, many of whom aspire to eventually live in Brighton or Hampton.

Across town, terraces in Kensington, about four kilometres north-west of the CBD, are also less than $500,000 – they are among the cheapest houses in the inner city.

Mr McMillan says when demand for property weakens as it has this year, it is important to keep to the inner-western suburbs. “The west is best if you are close to the rest,” he says, referring to how close suburbs are to transport and the CBD.

He says Newport, by the beach and about eight kilometres from the CBD, also has many great-value houses first home buyers should consider.

“The office market in Melbourne’s inner eastern suburbs has performed particularly well over the past year or so, with very low vacancy and strong rental growth. This has maintained a high level of investor interest in the region.”

Backed by a rental guarantee by the vendor, the building sold on an initial yield of 8.3 per cent.

ONCE CONSIDERED the best place in Melbourne to peruse Persian rugs and antiques – Armadale’s ritzy High Street, is detaching from its traditional past.
 
The former Geddes Antiques string of stores between 863 and 873 High Street have been demolished, and will make way for a 5-level, 3,000 square metre office building, with ground floor retail and 64 car parks in two basement levels.
 
The new office is being developed by Little Project Developments, the property company of Toll Boss Paul Little, which bought the High Street site in 2006 from a local investor.
 
LPD manager Richard Cookesley expects construction of the office to start in July.
 
He expects office rents in the premium quality new building to fetch about $300 per square metre, per annum, saying there is depth of demand for the inner south-eastern suburban office market.
 
A portion of land at the rear of the Geddes Antiques string of shops, and with a New Street address, will make way for apartments
 

But the renowned forward has chosen not to live at the Armadale address he previously used as his Melbourne base – and will instead auction that property today.

Tarrant and his wife, model Lauren Strauss, can expect about $4 million, sources say, for the Adelaide Street house, near High Street shops and both the Toorak and Malvern suburb borders.

The French Provincial style four-bedroom-plus study residence sits on an 813 square metre block and includes a double garage, pool, cabana, alfresco entertainment room, and a landscaped, irrigated garden.

RT Edgar Toorak’s Warwick Anderson and Phillip French will auction the home at midday.

Tarrant made headlines recently, deciding to re-sign with the Collingwood Football Club, where he played between 1998 and 2006. He had been a Fremantle Docker since 2007.

Earlier this month, former Hawthorn footballer turned new Gold Coast Suns player Campbell Brown listed his outgoing Hawthorn East home for auction next month. Hocking Stuart Hawthorn’s Glen Coutinho is expecting between $1 million and $1.08 million for that three-bedroom house.

Elsewhere in the immediate area, the Elite Ceramics building at 1174 – 1176 High Street that sold for $3.8 million in March, will be re-let as a retail premises.

Elsewhere in the immediate area, the Elite Ceramics building at 1174 – 1176 High Street that sold for $3.8 million in March, will be re-let as a retail premises.