13 Dec 2024 12 Fastest Growing Suburbs in Melbourne Ideal for First Home Buyers
Buying your first home is a huge milestone; hence, knowing the fastest-growing suburbs in Melbourne can make all the difference in finding the right area for your budget and lifestyle.
These suburbs aren’t just affordable—they offer future growth potential, lifestyle amenities, better infrastructure, and solid future returns, which are critical for first-home buyers navigating Melbourne’s competitive housing market.
As mortgage brokers with years of experience, we can guide you through the property market, grants, and opportunities to help you make confident financial choices to fit your homeownership goals.
This guide will highlight Melbourne’s top 12 fastest-growing suburbs, perfect for first-time home buyers. If you’re ready, let’s dive into why these booming suburbs are worth your attention.
Overview of Melbourne’s Property Market
Melbourne’s property market in 2024 is showing resilience despite economic challenges. According to CoreLogic (corelogic.com.au), the median house price in Melbourne currently sits at $806,196, while units average $588,417. The rental market is tightening, with rental yields climbing to 3.7% for houses and 4.4% for units as weekly rents continue to rise. Vacancy rates have dropped below 1.2% across the city, reflecting strong rental demand.
For first-home buyers, Melbourne’s outer and middle-ring suburbs are an attractive option. These areas offer more affordable housing prices compared to inner-city suburbs while benefiting from government incentives like the First Home Owner Grant. Melbourne’s rapid population growth (expected to hit 6 million by 2027, according to the Australian Bureau of Statistics (abs.gov.au)) continues to drive demand for both rental properties and owner-occupied homes.
Looking ahead to 2025, increased infrastructure projects—such as the North-East Link and new housing estates in growth corridors—are set to boost property values. For first-home buyers, purchasing in affordable suburbs with strong growth potential today could result in solid capital growth and potential returns within just a few years.
Melbourne’s blend of lifestyle, affordability in outer suburbs, and long-term growth prospects makes it an ideal market for first-home buyers looking to step onto the property ladder.
What First Home Buyers Should Look for in Growth Suburbs
Choosing the right suburb as a first-home buyer can feel overwhelming, but focusing on key factors can make your decision clearer. Here are five essential things to consider when evaluating growth suburbs:
- Affordability: Look for suburbs with a median house price or median unit price within your budget. Outer suburbs often provide more affordable properties without sacrificing lifestyle.
- Infrastructure Plans: Suburbs with upcoming shopping centres, schools, and healthcare developments signal future growth and lifestyle improvements.
- Transport Connectivity: Easy access to public transport or major freeways ensures convenient access to the city centre and job hubs.
- Population Growth: Strong population growth indicates a high demand for housing, which supports future capital growth and rental returns.
- Lifestyle Amenities: A suburb with green spaces, recreational facilities, and a range of amenities offers a desirable lifestyle, especially for owner-occupiers and families.
Focusing on these factors can help first-home buyers identify suburbs with the potential to grow in value and provide long-term stability.
Top 12 Fastest Growing Suburbs in Melbourne
Melbourne’s fastest-growing suburbs offer a mix of lifestyle, affordability, and future growth potential, making them ideal for first-home buyers. Here’s a detailed look at 12 standout suburbs from various regions in Melbourne.
Inner Bayside & Central Suburbs
#1 South Yarra
South Yarra is a vibrant, cosmopolitan suburb blending a luxurious lifestyle with convenience. Known for its trendy cafes, boutique shopping on Chapel Street, and lush green spaces like the Royal Botanic Gardens, it’s a hotspot for first-home buyers seeking proximity to the city.
- Median House Price: $1.8 million (units: $560,000)
- Transport and Accessibility: South Yarra Train Station and trams provide quick access to Melbourne CBD (just 10 minutes).
- Current/Planned Amenities: High-end shopping, art galleries, and recreational facilities like Fawkner Park.
- Growth Statistics: Consistently high demand with strong rental returns averaging 4.2% for units.
- First-Home Buyer Opportunities: Affordable units offer entry-level options for young professionals.
#2 Elwood
Elwood offers a relaxed coastal lifestyle combined with the charm of tree-lined streets and Art Deco apartments. Perfect for those seeking a balance between city living and beachside tranquillity.
- Median House Price: $2.3 million (units: $720,000)
- Transport and Accessibility: Multiple bus routes, Elsternwick Train Station, and bike paths connect Elwood to Melbourne CBD (20 minutes).
- Current/Planned Amenities: Trendy cafes, restaurants, and the iconic Elwood Beach.
- Growth Statistics: Stable property values with strong demand for rental properties in the area.
- First-Home Buyer Opportunities: Units and smaller homes provide affordable entry points for first-home buyers.
#3 Albert Park
Albert Park is a prestigious bayside suburb offering stunning beaches, heritage homes, and proximity to Melbourne’s CBD. Its tranquil atmosphere and strong community appeal make it highly desirable.
- Median House Price: $2.5 million (units: $780,000)
- Transport and Accessibility: Frequent trams to the CBD and walking distance to South Melbourne Market.
- Current/Planned Amenities: Waterfront dining, boutique shops, and expansive parklands.
- Growth Statistics: High property values with consistent capital growth.
- First-Home Buyer Opportunities: Affordable apartments provide a rare chance to enter this sought-after market.
South-Eastern Growth Corridor
#4 Cheltenham
Cheltenham is a bayside suburb that has grown into a thriving hub for families and professionals. Known for its lifestyle appeal, it’s a standout choice for first-home buyers looking for affordability and convenience.
- Median House Price: $950,000 (units: $590,000)
- Transport and Accessibility: Cheltenham Train Station offers a direct commute to the CBD in 30 minutes.
- Current/Planned Amenities: Westfield Southland, green spaces, and excellent schools like Mentone Girls’ Secondary College.
- Growth Statistics: High rental demand, with rental yields of 3.7% for units.
- First-Home Buyer Opportunities: Units and townhouses at affordable prices in a well-serviced area.
#5 Mentone
Mentone combines coastal charm with a family-friendly vibe, making it a highly sought-after suburb. Its top-tier schools and close-knit community are major draws for first-home buyers.
- Median House Price: $1.25 million (units: $650,000)
- Transport and Accessibility: Mentone Train Station provides convenient access to the city in 35 minutes.
- Current/Planned Amenities: Beautiful beaches, parks, and the renowned Mentone Grammar School.
- Growth Statistics: Steady population growth and strong owner-occupier demand.
- First-Home Buyer Opportunities: Affordable units with potential for long-term growth.
#6 Mornington
Mornington offers a relaxed, coastal lifestyle while remaining accessible to Melbourne. With stunning beaches, wineries, and an active community, it’s ideal for first-home buyers looking for lifestyle and investment value.
- Median House Price: $990,000 (units: $660,000)
- Transport and Accessibility: Just a 60-minute drive to Melbourne via the Peninsula Link.
- Current/Planned Amenities: A bustling shopping strip, restaurants, and recreational facilities like Mornington Park.
- Growth Statistics: High rental demand with yields averaging 3.8% for houses.
- First-Home Buyer Opportunities: Affordable homes and units with excellent future capital growth potential.
Western Growth Corridor
#7 Truganina
Truganina has emerged as one of Melbourne’s fastest-growing suburbs, offering a mix of affordability and convenience. It’s perfect for families and first-home buyers seeking to enter the property market in a developing area.
- Median House Price: $610,000
- Transport and Accessibility: Well-connected to train stations and the Western Freeway, with a 25-minute drive to the CBD.
- Current/Planned Amenities: Green spaces, reputable schools, and healthcare developments.
- Growth Statistics: Population growth of 20% in recent years.
- First-Home Buyer Opportunities: Affordable detached houses with promising rental returns and future capital growth.
#8 Rockbank
Rockbank is a hidden gem in Melbourne’s western growth corridor, offering large blocks at affordable prices. With significant infrastructure upgrades planned, it’s attracting attention from first-home buyers and investors.
- Median House Price: $550,000
- Transport and Accessibility: New Rockbank Train Station on the Ballarat Line; 30 minutes to Melbourne CBD.
- Current/Planned Amenities: Upcoming schools, shopping centres, and community hubs.
- Growth Statistics: Strong demand for affordable housing and large land sizes.
- First-Home Buyer Opportunities: Affordable entry-level homes with excellent growth potential.
Northern Growth Corridor
#9 Mickleham
Mickleham is a rapidly developing suburb that blends affordability with family-friendly amenities. Its growth is fueled by new housing estates and excellent connectivity to Melbourne’s CBD.
- Median House Price: $650,000
- Transport and Accessibility: Quick access to the Hume Freeway and Melbourne Airport; well-connected bus services.
- Current/Planned Amenities: New schools, shopping centres, and expansive parklands in progress.
- Growth Statistics: Population growth of 22% in the past five years.
- First-Home Buyer Opportunities: Detached houses with modern layouts at competitive prices.
#10 Donnybrook
Donnybrook is a quiet, up-and-coming suburb with a focus on family living and outdoor spaces. It’s ideal for buyers seeking an affordable entry into Melbourne’s northern suburbs.
- Median House Price: $600,000
- Transport and Accessibility: Donnybrook Train Station; a 35-minute train ride to the CBD.
- Current/Planned Amenities: New recreation hubs, schools, and residential estates under development.
- Growth Statistics: Consistent demand for house-and-land packages.
- First-Home Buyer Opportunities: Affordable suburbs with growth potential driven by infrastructure upgrades.
Established Suburbs with Strong Growth
#11 Frankston South
Frankston South provides a mix of leafy suburbia and stunning coastal views, offering a relaxed lifestyle within reach of Melbourne. It’s a great option for families and first-home buyers.
- Median House Price: $1.1 million (units: $680,000)
- Transport and Accessibility: Well-connected via train and freeway links; 50 minutes to Melbourne CBD.
- Current/Planned Amenities: Bayside shopping centres, reputable schools, and recreational facilities.
- Growth Statistics: High rental demand with rental yields of 3.5% for houses.
- First-Home Buyer Opportunities: Affordable homes and units with strong owner-occupier demand.
#12 Caulfield
Caulfield is a well-established suburb with excellent transport options and access to premium schools, making it ideal for families and young professionals alike.
- Median House Price: $1.9 million (units: $730,000)
- Transport and Accessibility: Caulfield Train Station and tram lines provide quick access to Melbourne CBD.
- Current/Planned Amenities: Cafes, shopping strips, and Caulfield Racecourse.
- Growth Statistics: Strong buyer demand with long-term growth potential.
- First-Home Buyer Opportunities: Units and townhouses offering affordable entry points into this prestigious suburb.
These 12 suburbs showcase the diversity of Melbourne’s property market, offering first-home buyers everything from affordable housing in growth corridors to lifestyle options in bayside and inner-city locations.
Financial Support for First Home Buyers in Melbourne
Navigating the property market as a first-home buyer in Melbourne can be daunting, but there are several financial support options designed to make the process more accessible. Here’s a breakdown of the key initiatives:
- First Home Owner Grant (FHOG): Eligible first-home buyers can receive up to $10,000 when purchasing a new home valued under $750,000 in Melbourne. This grant helps ease upfront costs and is a major draw for buyers targeting newly built homes in growth suburbs.
- Stamp Duty Concessions: In Victoria, first-home buyers are entitled to stamp duty exemptions or discounts for properties valued up to $600,000 (full exemption) or between $600,001–$750,000 (partial concessions). This can save buyers tens of thousands of dollars.
- Victorian Homebuyer Fund: This shared equity scheme allows eligible buyers to purchase a property with as little as 5% deposit, with the government contributing up to 25% equity toward the home. It’s an excellent option for buyers struggling to save a larger deposit.
- First Home Guarantee Scheme (Federal): Under this program, first-home buyers can secure a home loan with just 5% deposit without paying lenders mortgage insurance (LMI). This applies to both new and existing homes.
- Stamp Duty Waivers for Off-the-Plan Purchases: Buyers purchasing off-the-plan homes or house-and-land packages may qualify for additional stamp duty savings, especially in Melbourne’s fastest-growing suburbs.
- First Home Super Saver Scheme (FHSS): Buyers can save for a home deposit through voluntary superannuation contributions, allowing tax savings while growing their deposit faster.
These financial support programs help reduce the upfront costs of purchasing a home and make entering Melbourne’s competitive housing market more achievable for first-home buyers. If you’re eligible, these initiatives could save you thousands and make your property journey smoother.
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FAQ
What are the fastest-growing suburbs in Melbourne for first-home buyers?
The fastest-growing suburbs include Mickleham, Truganina, South Morang, Clyde North, and Mornington. These boom suburbs offer affordable median property prices, strong real estate market demand, and plenty of amenities for families and potential buyers.
How do property prices in Melbourne’s growth suburbs compare to inner-city suburbs?
Property prices in Melbourne’s growth suburbs are significantly lower than those in inner-city suburbs, making them more attractive to first-home buyers. For example, the median price in Tarneit is $620,000 compared to millions for a three-bedroom house in South Yarra or Brighton.
Why are Melbourne’s fastest-growing suburbs ideal for families?
These Victorian suburbs often feature private schools, access to schools, parks, and family-friendly amenities, making them perfect for a suburb among families. With their ample lifestyle amenities, stable suburbs like Craigieburn or Cheltenham offer future long-term growth and a wealth of amenities.
What is driving growth in Melbourne’s outer suburbs?
Melbourne’s outer suburbs benefit from lower property prices, investment in city transport links, and proximity to lifestyle locations. Property price forecasts also highlight future capital growth in these areas due to infrastructure developments and population growth.
How do cost of living pressures affect first-home buyers in Melbourne?
Cost of living pressures make affordable homes in Melbourne’s growth suburbs more appealing to potential buyers. Areas like Truganina and Pakenham provide a better investment return while offering plenty of amenities without the high price tag of inner-city properties.
What role do rate cuts and the cash rate play in Melbourne’s real estate market?
Rate Cuts and changes to the cash rate significantly impact the affordability of loans, influencing buyer activity in Melbourne’s real estate market. Lower rates often boost demand in growth suburbs with historical growth, as they make purchasing a home more achievable for first-home buyers.
What should potential buyers look for when choosing a suburb in Melbourne?
Buyers should consider factors like property market forecast, proximity to lifestyle locations, access to schools, and wealth of amenities. Focusing on boom suburbs with a type of location that offers strong investment return and future long-term growth is key to making a smart purchase.
Final Thoughts
Melbourne’s fastest-growing suburbs provide first-home buyers with an exciting combination of affordability, lifestyle, and strong future growth potential. With property price forecasts signalling long-term opportunities, there’s no better time to enter Melbourne’s thriving housing market.
At EverLend, our expert brokers specialise in helping first-home buyers across Melbourne suburbs, from St Kilda to Mickleham, find the right mortgage options to match their goals. Ready to take the next step toward homeownership? Call us at 03 7036 3356 for a free consultation or visit EverLend today!