Best Performing Melbourne Suburbs in 2025 and What It Means for Buyers in 2026
The Melbourne property market moved into a more stable phase throughout 2025. While overall growth across the city remained moderate, several Melbourne suburbs recorded stronger results, driven by affordability, consistent buyer demand, and limited established housing supply.
For buyers planning to buy property in Melbourne in 2026, understanding which suburbs performed well in 2025 and why they outperformed provides valuable insight. These results highlight where demand has remained resilient and where property fundamentals continue to matter most.
Melbourne Property Market Overview 2025
Across metropolitan Melbourne, annual price growth in 2025 generally sat in the low to mid single-digit range. Performance varied significantly by suburb and property type.
Rather than broad-based growth, the year was defined by selective outperformance. Suburbs offering practical housing at more accessible price points, along with well-located medium-density options, tended to achieve stronger results.
Melbourne Suburbs With Strong House Price Growth in 2025
Affordable Melbourne Suburbs With Strong Growth
Some of the strongest growth in 2025 occurred in more affordable Melbourne suburbs where buyer demand remained steady and supply was constrained.
Suburbs including Frankston North, Coolaroo, Dallas, Melton, and Meadow Heights recorded annual house price growth broadly ranging between 15% and 18%.
These suburbs benefited from:
relative affordability compared to surrounding areas
strong demand from owner-occupiers and first-home buyers
limited established housing stock
While these figures indicate strong performance, results varied significantly by street and property type. Buyers relying solely on suburb averages risk overlooking these differences.
Middle-Ring Melbourne Suburbs With Steadier Performance
Middle-ring Melbourne suburbs delivered more moderate but consistent growth throughout 2025. These areas continued to attract families and upgraders seeking established homes, access to schools, and proximity to employment hubs.
Suburbs across municipalities such as Whitehorse, Moonee Valley, and Merri-bek generally recorded annual growth in the 2% to 4% range, with stronger outcomes in well-positioned pockets.
In these locations, properties with good orientation, functional layouts, and strong street appeal tended to outperform broader suburb medians.
Inner Melbourne and Higher-Value Suburbs
Inner Melbourne performance remained highly segmented during 2025.
Some higher-value suburbs held their ground due to scarcity and owner-occupier demand, while others experienced flatter conditions as buyers became increasingly price-conscious.
This divergence reinforced a key point for buyers. Inner-city location alone was not enough to drive growth. Property fundamentals played a greater role than postcode.
Melbourne Unit and Townhouse Markets That Outperformed in 2025
One of the clearer trends of 2025 was the improved performance of units and townhouses in selected Melbourne suburbs.
In locations such as Wheelers Hill, Frankston South, Kensington, Bentleigh, and Chelsea Heights, unit and townhouse values recorded growth ranging from the mid-teens to above 20%.
This performance reflects:
affordability pressures directing buyers toward medium-density housing
downsizers and professionals prioritising location over land size
limited supply of high-quality townhouses in established suburbs
This trend is expected to remain relevant in 2026 as buyers continue balancing affordability, location, and lifestyle.
What 2025 Suburb Performance Means for Buyers in 2026
Looking ahead, the Melbourne property market is expected to remain selective rather than uniform.
Key themes buyers should consider in 2026 include:
continued demand for affordable family homes in outer and middle-ring suburbs
ongoing strength in well-located townhouses and units
constrained supply in established areas
growth outcomes varying significantly by suburb, street, and property type
Rather than chasing the strongest performing suburbs from 2025, buyers will be better served by understanding why those suburbs performed well and whether those drivers are still present.
Why Suburb Growth Data Alone Is Not Enough
While suburb-level growth figures provide useful context, they should not be the sole basis for a buying decision.
Buyers do not purchase suburb averages. They purchase individual properties.
Long-term performance is influenced by factors such as:
layout and functionality
land component and orientation
street quality and surrounding context
comparable local sales evidence
This is where a property-by-property assessment becomes critical, particularly in markets where outcomes differ widely within the same suburb.
Planning to Buy in Melbourne or the Mornington Peninsula in 2026
The strongest outcomes in 2025 were achieved by buyers who focused on fundamentals rather than headline suburb performance. That approach is likely to matter even more in 2026 as market conditions remain selective.
If you are planning to buy in Melbourne or the Mornington Peninsula and would like to talk through your options, you are welcome to book a one-to-one meeting with me. It is an opportunity to review current conditions, assess your position, and approach the buying process with clarity before inspections begin.