SYDNEY-based property investors have become so frustrated with the Harbour City’s lofty home prices that many have been looking toward Melbourne real estate instead.

Like Sydney, the Victorian capital has also been in the midst of a housing boom, but the average home remains around $200,000 cheaper and a greater supply of homes has resulted in less competition for sales.

Core Logic RP Data figures show that Melbourne has over $30,000 properties on the market, while Sydney has just over 17,000 — roughly half the homes, despite a similar population.

Melbourne-based project marketer Mark Forytarz of Castran Gilbert said Sydney investors have discovered that their money can go a lot further in Melbourne and inquiries on his city’s housing projects have shot through the roof.

“A lot of Sydney investors have realised that the recent spike in prices has diminished their potential rental returns, so they’ve started looking for other options and Melbourne is an attractive choice for them,” Mr Forytarz said.

“The interest has become so great that we’re doing exhibits to showcase Melbourne developments to Sydney buyers.”

Newly launched residential development ‘Marco’, which will comprise 433 apartments across 40-storey and 36-storey towers, provides a glimpse into the rising gulf between property offerings in each of the cities.

Marco is within a popular precinct in Melbourne’s inner city, but apartment prices start at just $381,000.

Prices on Sydney’s inner city apartments have been in a different league — 50sq m apartments have recently sold for over $1 million, while a 2.85m-wide apartmentin need of serious renovation recently sold for $965,000.

Citywide trends further illustrate the gap in prices — the median price of a Melbourne house remains at $590,000, compared to Sydney’s $767,000.

Melbourne units have a median price of $455,000. In Sydney it is $590,000.

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