Looking to buy property in the trendy Australian hotspot of Melbourne? Read our handy overseas property guide. Plus, find property in the rest of Australia.

Melbourne is the second most populous city in Australia, with a metropolitan area population of approximately 3.74 million.

The city is located around Port Phillip Bay in Australia's south-east and is the state capital of Victoria.

Known as Australia's cultural and sporting capital, the city is considered the spiritual home of cricket and Australian rules football.

What's more, Melbourne was voted 2005's "most attractive destination in the world in which to live for ex-pats in a survey of 130 cities worldwide undertaken by London-based Economic Intelligence Unit (EIU)," the channel4.com website reported.

To find property in Melbourne and more property in Australia, visit: www.justoverseas.co.uk/propertyinaustralia

The Lonely Planet summed up the city's appeal when it explained: "Melbourne is dubbed marvellous for a reason.

"Healthy hedonism masquerades as high art: Melburnians are equally passionate about football and ballet, fashion and restaurants. They are ravenous for music and hot for theatre. It's a smorgasbord of a city that you'll want to sink your teeth into.

"A leafy bayside community on the 'upside-down' Yarra River, Melbourne is, by turns, cosmopolitan, suburban, cultivated, conservative and an avant-garde haven.

"Visitors come for its shopping, restaurants, nightlife and sporting calendar; most agree that it's one of the world's most liveable cities."

Pros and Cons to Buying Property in Melbourne

The channel4.com website agreed that Melbourne was a popular destination for people looking to purchase holiday and second homes. It stated that "new apartments at Chevron, Melbourne - where the TV soap Neighbours is filmed - start from only £120,000 and include five per cent rental guarantee for two years".

However, The Global Property Guide noted that Mebourne was the second most expensive city in Australia and that property typically costs AUS$375,000.

Long-term data quoted by the site indicates that prices have risen by 156.02 per cent over the last decade.

What's more, the echoice.com.au site suggested that Australian Property Monitors (APM) have recently revealed that 2007 was an impressive year for house price inflation in the city.

The site explained: "Melbourne's house values as boom time conditions by anyone's definition."

It cited data from APM which showed that house prices jumped nine per cent over the last 12 weeks of the year alone. Apartment prices lifted six per cent in the same period.

APM general manager Michael McNamara told the site: "Whilst for some, buying Melbourne property has slipped further out of reach, it has been a year when investors have hardly been able to stop smiling.

"An annual 25 per cent increase in Melbourne house prices is quite extraordinary and the size of that growth is certainly larger than anyone expected."

According to the site, Melbourne's "middle ring suburbs" could be the big improvers over 2008. In particular, it said that those in the west of the urban area are proving very popular.

It added that suburbs like Toorak, Canterbury, Brighton and Armadale were some of the most popular, with average property prices in excess of AUS$1 million. Other popular, but cheaper areas include Caulfield North, Glen Iris, Camberwell and Brighton East. In these areas, prices are typically around AUS$200,000 cheaper than in the more exclusive districts.

What you need to know when buying property in Australia

Foreigners hoping to buy property in Australia will need to gain approval from the Foreign Investment Review Board (FIRB).

The Global Property Guide added: "FIRB approval is not required by Australian citizens resident abroad, or for acquisitions in residential-zoned properties by foreign nationals holding permanent resident or 'special category' visas (i.e. New Zealand citizens), or by foreign nationals purchasing with their Australian spouse as joint tenant."

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