The 10 best suburbs in Melbourne for first home buyers

Find out which suburbs in Melbourne made the top 10 list in Canstar’s Bright Starters Australian First Home Buyer Report powered by Hotspotting.

There are plenty of great locations in Melbourne where you can buy a home for less than $731,500. This was the cut-off price we used to come up with our ‘Bright Starter’ suburbs in the Victorian capital. (For more on why we chose this see our full report.)

Of course, price isn’t the only consideration for first home buyers. A good lifestyle and prospects for growth should also be on the checklist. In Canstar’s inaugural Bright Starters Australian First Home Buyer Report we used five key metrics – sales volumes, price growth, vacancy rates, infrastructure and proximity to work and amenities – to identify suburbs that are desirable and likely to grow in value over time. Check out our list below.

The 10 best suburbs in Melbourne for first home buyers

• Broadmeadows 
• Brunswick East (Units)
• Caroline Springs 
• Cheltenham (Units) 
• Cranbourne 
• Dallas 
• Epping 
• Narre Warren 
• Preston (Units) 
• St Albans 

Broadmeadows

The Housing Industry Association (HIA) says the Hume LGA in Melbourne’s north is the fastest-growing area in Australia. Its affordability, land availability and transport links have made this a target for first home buyers. Sales activity is elevated and prices have responded. Merrifield City, Merrifield Business Park, Beveridge Intermodal Terminal and the Sunbury train line upgrade are among the projects creating thousands of jobs. Broadmeadows is a centre with an array of facilities and houses in the $500,000s.

Brunswick East (Units)

CBD proximity, good transport links and a major education-employment hub are core factors driving Moreland LGA markets. The area is well serviced by two Metro train lines and is close to both Essendon and Tullamarine airports. Also important is the education and medical employment hub of Parkville. More than 100,000 students attend the University of Melbourne and RMIT University. Brunswick East units are an affordable option here.

Caroline Springs

The suburbs of the City of Melton in the far west provide the only precinct in the Greater Melbourne area with median house prices in the $400,000s. The master-planned suburb of Caroline Springs is a more expensive but, perhaps, more appealing option. It provides modern housing around a commercial centre, with extensive parkland and sports facilities. There’s a schools precinct, a commuter train station and access to the Western Freeway.

Cheltenham (Units)

This is one of those middle Melbourne precincts increasingly targeted for its lifestyle and relative affordability, especially the unit market. Cheltenham is an exceptional area for recreational facilities, with six golf courses in and around the suburb. It has a major retail hub around Westfield Southland and also Kingston Centre, a major health facility, notably for services for the aged. There are rail links to Melbourne.

Cranbourne

Virtually every suburb of the City of Casey is a growth market, with sales activity and prices rising strongly, and vacancies low. Cranbourne is a commercial hub for this fast-growing LGA, with extensive retail, sports, leisure and education facilities. Cranbourne has everything from a golf course to a racecourse, from a TAFE campus to the Royal Botanic Gardens, as well as rail links to Melbourne. First home buyers buy heavily here.

Dallas

Sales activity and the pace of price growth are rising in this suburb, but houses remain affordable for many buyers. This northern suburb in one of Melbourne’s key growth areas has good transport links, numerous schools and colleges, access to a major green space corridor and proximity to a series of employment zones within a few stops on the train line. It’s also handy to Melbourne Airport.

Epping

The northern suburb of Epping ticks a lot of boxes for employment, infrastructure and services. It has extensive retail options, a major hospital and many schools. It is close to the Melbourne Wholesale Markets and major employment zones along the nearby Hume Freeway and Metropolitan Ring Road. It’s a key hub in the Whittlesea LGA, which is one of Melbourne’s busiest areas for new population, popular with first home buyers.

Narre Warren

This is a key centre of infrastructure and employment in the City of Casey, surrounded by affordable housing in an area of high demand and low vacancies. There are big retail, sports and recreation facilities here, at the intersection of the Princes Highway and the Princes Freeway. A short drive down the freeway is the vast education-medical campus which includes Casey Hospital, Federation University and TAFE. Commuter rail completes the picture.

Preston (Units)

Many suburbs in the Darebin LGA have median house prices above $1 million but affordable units are a popular alternative. The Darebin economy revolves around education and training, with the La Trobe University education-medical precinct a major employment node, while light industrial parks also provide jobs. Several precincts are Major Activity Centres and the focus of future development. Preston is a popular suburb for its lifestyle and affordable units.

St Albans

The City of Brimbank is an affordable middle-ring precinct in Melbourne’s west with fantastic infrastructure and affordable housing. The suburb of St Albans includes a Victoria University campus, Sunshine Hospital, numerous schools, lots of green space and shopping centres. It has rail links to Melbourne and abuts the Western Ring Road. Nearby suburbs like Deer Park have big commercial-industrial complexes.

The best suburbs in Melbourne for first home buyers

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Sources: Median price, growth and median rent: CoreLogic as at 1 February 2022. Initial outlay, time to save and repayment data: canstar.com.au as at March 2022. (U) stands for units. *Initial outlay includes the deposit, stamp duty, transfer fee and mortgage registration fee.  ^Time to save calculations are based on the time required to save up the initial outlay costs with the average income (ABS Personal Income by greater capital city statistical area, adjusted by ABS Wage Price Index, June 2021). Calculations assume that 20% of after-tax income is saved each month, earning a savings rate of 0.62% (average bonus savings rate over the past 12 months to 1/03/22). 2021/22 tax rates plus the 2% Medicare Levy are applied to the annual income and savings interest, and inflation of 2.5%pa is applied to income and property price. Dual income calculations assume there are two savers with the average income. Actual time to save will vary depending on your individual circumstances as well as the rate of property growth.  +Repayment calculations assume principal and interest repayments over a 30-year loan term with an interest rate of 3.36% (average owner-occupier variable rate over the 12 months to 1 March 2022). LMI for an owner-occupier first home buyer (per Genworth LMI Premium Calculator) is included in the loan amount for the 10% deposit monthly repayment calculations. For initial outlay, time to save and repayment data based on a 20% deposit download the full Bright Starters report.

Cover image source: Adam Calaitzis/Shutterstock.com

About Terry Ryder

Terry is the founder and Managing Director of hotspotting.com.au, which he created in 2006 to help investors find the best places to buy. Terry has been a specialist researcher and writer on Australian residential property in a career spanning four decades. During that time he has published four books.

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