The 10 best affordable suburbs in Melbourne 2023
Find out which suburbs in Melbourne made the top 10 list in Bright Stars: Canstar’s Best Affordable Suburbs Report powered by Hotspotting.
There are plenty of great locations in Melbourne where you can buy a home for less than $706,563. This was the cut-off price we used for our ‘Bright Star’ suburbs in the Victorian capital. (For more on why we chose this see our full report.)
Of course, price isn’t the only consideration when selecting a location to buy property. Lifestyle benefits and prospects for growth should also be on the checklist. In Canstar’s Best Affordable Suburbs Report we used five key metrics – sales volumes, price growth, vacancy rates, infrastructure and proximity to work and amenities – to identify the affordable suburbs that are desirable and likely to grow in value over time. Check out our list below.
The 10 best affordable suburbs in Melbourne
- Diggers Rest
- Epping
- Kalkallo
- Kensington (Units)
- Meadow Heights
- Melbourne CBD (Units)
- Mickleham
- Richmond (Units)
- Sunbury
- Tarneit
Diggers Rest
This new growth area in the north-west of Greater Melbourne has a train station and primary school and is emerging alongside Sunbury, which has all the amenities of a small city. Few Melbourne locations have recorded growth in the past year, but the Diggers Rest median price has risen 6.2% – and the long-term growth rate is 8% per year. Homes sell in less than four weeks and the vacancy rate is 0.4%.
Epping
This northern suburb not only attracts consistently strong buyer demand (more than 400 house sales in the past year at a median price of $680,000) but is a CBD of services and amenities for the Whittlesea LGA, including a major hospital, extensive retail, lots of schools, Melbourne Wholesale Markets and commuter rail. Its enduring popularity is also shown by its vacancy rate: 0.5%. Rents have risen 13% in the past year.
Kalkallo
At a time when sales activity and prices have been falling in Greater Melbourne, Kalkallo has attracted strong demand and its median price has increased 8.5% in the past year. Despite being one of the new development areas (which often have high vacancies), the vacancy rate here is just 1.1%. Kalkallo, on the Hume Highway in the far north, is close to major business parks and has rapidly evolving community infrastructure.
Kensington (Units)
Sales in this near-city suburb are evenly divided between houses and units, but while the median house price is $1,220,000, units are less than half that level at $560,000. It’s popular with renters: the vacancy rate has dropped sharply since early 2021 (when it was 4.8%) and is now just 0.2%, with rents rising sharply. Proximity to the hospitals/universities precinct in neighbouring Parkville and Carlton ensures consistent strong demand.
Meadow Heights
There has been moderate growth recently in this suburb, but any increase in prices is notable in a weak Melbourne market. Relative affordability (houses in the $500,000s) is an attraction, plus the array of amenities and services on the southern fringe of the suburb. Vast green areas, including Broadmeadows Valley Park, add further appeal. The vacancy rate has dropped markedly in the past two years and is now 0.5%.
Melbourne CBD (Units)
Inner-city areas with affordable apartments have rising demand. You wouldn’t invest based on the capital growth record (the median price is lower than a decade ago) but there were more than 800 apartment sales in the past year, with a 3% rise in the median at a time when Melbourne prices generally have been falling. The vacancy rate is 2.1% and continues to fall steadily from the 2020 peak of 12.7%.
Mickleham
This new-growth suburb on Greater Melbourne’s northern fringe is a rarity in the currently weak Victorian market – the median price rose 10.5% in the past year at a time when price growth is hard to find. The vacancy rate is 1.1%, a low level for a new development precinct, and rents have risen 9% in the past year. Mickleham is evolving alongside well-established Craigieburn, with an array of amenities.
Richmond (Units)
Houses in trendy inner-city Richmond are beyond the reach of most young buyers (median price $1,400,000) but units are less than half the price (median price $640,000) – and there were 344 unit sales in the past year. The suburb is dominated by singles and young couples without kids – and the vacancy rate has dropped sharply since late 2020 (when it was 7%) to 0.7% now, with rents up 15%-20%.
Sunbury
This suburb on Melbourne’s northern fringe just off the Calder Freeway is one of the most popular with buyers in the metropolitan area, with more than 800 sales in the past 12 months at a median house price of $650,000. It’s evolved into a mini city with associated infrastructure including multiple schools and a major retail precinct with a train station linking to central Melbourne. Vacancy is 0.9% and rents have risen 12%.
Tarneit
This suburb in Wyndham City in the south-west of Greater Melbourne (but just 30km from the CBD) is notable for delivering meaningful price growth in the past year – rare in the weak Melbourne market. Tarneit has become a major growth area and now has significant infrastructure in schools and shopping. And vacancies are low at 1.2%, with rents up 12%-15% in the past year.
The best affordable suburbs in Melbourne
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Suburb | Median price | 10% Deposit | |||
---|---|---|---|---|---|
Initial outlay* | Monthly repayment+ | Repayments as a percentage of dual income^ | |||
With FHB concession | No FHB concession | ||||
Diggers Rest | $645,000 | $90,626 | $115,835 | $3,369 | 27.30% |
Epping | $680,000 | $103,983 | $122,377 | $3,552 | 28.80% |
Kalkallo | $620,000 | $81,686 | $111,162 | $3,239 | 26.20% |
Kensington (U) | $560,000 | $69,916 | $99,948 | $2,925 | 23.70% |
Meadow Heights | $580,000 | $72,405 | $103,686 | $3,030 | 24.50% |
Melbourne (U) | $430,000 | $51,678 | $70,377 | $2,246 | 18.20% |
Mickleham | $660,000 | $96,231 | $118,639 | $3,448 | 27.90% |
Richmond (U) | $640,000 | $88,799 | $114,901 | $3,343 | 27.10% |
Sunbury | $650,000 | $92,475 | $116,770 | $3,395 | 27.50% |
Tarneit | $650,000 | $92,475 | $116,770 | $3,395 | 27.50% |
Sources: Median price: CoreLogic as at February 2023. Initial outlay and repayment data: canstar.com.au prepared on 26 June 2023. (U) stands for units. *Initial outlay figures include the deposit, stamp duty, mortgage registration and transfer fees; and lenders’ mortgage insurance (LMI) premium. Stamp duty calculated based on an owner occupier purchase of an established dwelling. LMI premium based on Helia LMI Premium Calculator for an owner occupier borrower and a loan term of 30 years. +Monthly repayments calculated based on the average variable interest rates of 5.7% and a loan term of 30 years. Interest rates based on the average owner occupier, principal and interest variable rate for a loan of $500,000 over the past year, rounded to the nearest 0.1%. ^Percentage of income based on the average total income by Greater Capital City Statistical Area (ABS Personal Income, 2019-20), adjusted by the ABS Wage Price Index (Dec-2022) for each state. A dual income assumes two people with the average income. For estimates on initial outlay, monthly repayments and repayments as a percentage of income based on a 20% deposit see full report.
Cover image source: Mark and Anna Photography/Shutterstock.com
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