The 10 Best Suburbs to Invest in Melbourne in 2025
With a choice of over 300 suburbs, it is very challenging finding the right suburb in Melbourne that matches your requirements. After lots of research, I have selected the 10 best suburbs to invest in Melbourne in 2025. My main criteria were affordability, quality of life, and rental yield.
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Is It Worth Buying in Melbourne in 2025?
The Melbourne property market has gone through some rough years ever since the start of Covid. The market was extremely overpriced in 2020. This has changed and the prospects of buying in Melbourne are looking much better in 2025. The city now offers a lot of affordable properties in some great locations. Melbourne has become more attractive than other major Australian cities like Adelaide, Perth, Canberra or Sydney. Median house prices in 2025 in Melbourne are approximately 40% cheaper than in Sydney.
Check out my article comparing Adelaide and Melbourne.
Melbourne finds itself in a similar situation to where Brisbane and Perth were about three to four years ago. People who bought in those cities then have seen the value of their properties go up significantly. This is expected to happen to the Melbourne property market, especially with interest rates predicted to drop further in the next two years.
If you are ready to buy property in Melbourne, then read my blog post on how to avoid losing money when making international money transfers.
Top 10 Suburbs to Invest in Melbourne in 2025
1. Ascot Vale
Ascot Vale is a suburb that offers a combination of character and convenience. Known for its rich history and vibrant community, this area attracts both young professionals and families. The suburb boasts beautiful period homes and a leafy environment, making it an attractive place to live.
The rental yield in Ascot Vale makes it appealing for investors. The area offers a solid return on investment with high demand for rental properties. This demand is fueled by its proximity to the Melbourne Central Business District (CBD) and access to public transport options.
Quality of life in Ascot Vale is enhanced by its diverse range of amenities. You can enjoy local shops, cafes, and parks. The suburb also has a strong sense of community, with numerous events and activities throughout the year.
Positioned just 6 kilometers from the heart of Melbourne, Ascot Vale provides easy access for commuters. The suburb is well-connected by tram and train services, making travel to the city quick and efficient. This accessibility is a key factor in its popularity.
For those interested in education options, Ascot Vale has several schools catering to various needs. The presence of both primary and secondary schools in the area adds to its attractiveness for families.
2. Bentleigh
Bentleigh is a suburb known for its strong community feel and high demand for property. You’ll find a blend of residential and commercial areas, making it appealing for both residents and investors.
One key factor that makes Bentleigh attractive is its proximity to amenities. The suburb boasts excellent schools, parks, and shopping centers. This makes it a popular choice for families and young professionals looking for convenience.
Rental yields in Bentleigh are consistently strong. The area has a healthy demand from renters, ensuring that properties do not stay vacant for long. This makes it an ideal suburb if you’re seeking reliable rental income.
Housing prices in Bentleigh are considered more affordable compared to some inner-city areas. This attracts first-time home buyers and those looking to upgrade. With a diverse range of housing options, you can find something that fits your budget and investment strategy.
Bentleigh’s transport links are another advantage. With easy access to public transport, including trains and buses, commuting to the city is straightforward. This connectivity can enhance property value over time, particularly as more people seek locations with good transport options.
The local community is vibrant and active, with numerous events and activities taking place throughout the year. As an investor, you’ll benefit from the area’s strong community spirit, which often translates to stable property values.
3. Carlton
Carlton is a suburb that offers a mix of historic charm and modern convenience. Known for its iconic Lygon Street, you’ll find some of Melbourne’s best Italian restaurants and cafés. This vibrant area is popular with students and academics due to its proximity to the University of Melbourne.
The real estate market in Carlton is diverse, with options ranging from Victorian terraces to modern apartments. Property prices are on the higher side, but the investment potential remains strong due to consistent demand. Renting out property here can yield good returns, thanks to the steady stream of students and professionals.
In terms of lifestyle, Carlton boasts several parks, including the scenic Carlton Gardens, which houses the Royal Exhibition Building. Cultural attractions like the Melbourne Museum provide additional entertainment options.
Public transport is another advantage. With tram and bus routes crisscrossing the area, you’ll find it easy to get around.
For those interested in the arts and culture, Carlton offers numerous theaters and galleries. You’ll have plenty of opportunities to explore creative ventures right in your neighborhood.
4. Coburg
Coburg is a suburb in Melbourne with a lot to offer investors. The area is known for its affordability. With median house prices around $1,150,000, Coburg provides a balance between cost and potential growth.
The quality of life in Coburg is appealing due to its mix of cultural centers, parks, and cafes. These amenities make it a great place to live, attracting a diverse set of residents. This diversity supports a vibrant community feel that many people look for when choosing a place to call home.
Coburg’s location offers easy access to Melbourne’s city center, providing convenience for residents who work in the city. This easy access is a strong point for potential tenants, thereby boosting rental demand. Strong infrastructure and transport links contribute to its attractiveness.
In terms of rental yield, Coburg shows promise with a good return on investment for property owners. As the suburb continues to develop, increased demand might lead to higher rental prices. This could make it a solid choice for those looking for long-term gains.
5. Glen Waverley
Glen Waverley is a popular suburb for families and professionals. It’s located about 19 kilometers southeast of Melbourne’s Central Business District. The area is known for its excellent schools, such as Glen Waverley Secondary College, which rank among the top in Victoria.
The real estate market in Glen Waverley is strong, driven by high demand from families. With median house prices climbing beyond $1.5 million, it’s considered a premium housing market.
Rental demand in the suburb is robust. Low vacancy rates mean that properties are often rented quickly, providing a steady income stream for investors. The high demand is partly due to the nearby schools and community amenities.
The area boasts good amenities, including shopping centers, parks, and public transport options.
6. Mitcham
Mitcham is a great place to invest if you’re looking for a balance between affordability and growth potential. Located in the eastern suburbs of Melbourne, it offers a friendly community atmosphere. The suburb is seeing a surge in property demand due to its appealing location and the ongoing upgrades to infrastructure.
As a suburb in the middle ring of Melbourne, Mitcham provides a good mix of convenience and space. You can enjoy easy access to public transport with Mitcham Railway Station nearby.
The housing market in Mitcham is competitive but still affordable compared to suburbs closer to the city center. The area is experiencing gentrification, which is drawing more young families and professionals. This trend is likely to boost property values over time.
Mitcham’s growing popularity is supported by a range of amenities. You’ll find parks, schools, and shopping centers within reach, enhancing the overall quality of life. The neighborhood vibe is peaceful, making it a nice place to settle and invest in.
In terms of rental yield, Mitcham is showing promising signs. As more people move into the area, rental demand increases. This can provide a steady income stream if you choose to invest in a rental property.
7. Preston
Preston is a thriving suburb that offers a vibrant community atmosphere. It’s known for its lively markets, diverse dining options, and cultural events. This area attracts a mix of families, young professionals, and students, thanks to its dynamic environment and welcoming vibe.
When it comes to rental yield, Preston is appealing for investors. The suburb offers strong rental returns, with yields around 4.2%, surpassing many inner-city areas.
The affordability of housing in Preston is another highlight. Compared to more central Melbourne locations, you find more reasonable prices here.
Preston is also known for its excellent public transport links. With trains, trams, and buses readily available, commuting to other parts of Melbourne is straightforward.
Schools and parks contribute to Preston’s appeal for families. The area features several quality educational institutions and lush parks, making it a great spot for raising a family.
The suburb’s ongoing gentrification adds to its growth potential. With continuing developments and improvements, Preston is becoming even more desirable. This trend promises to enhance the area’s property values in the coming years.
8. Tarneit
When considering property investment opportunities in Melbourne, Tarneit stands out. This suburb offers stable and moderate growth, making it an attractive option for investors. With its growing infrastructure and planned developments, Tarneit is appealing to both families and young professionals.
The rental market in Tarneit is promising. It boasts good rental yields, with houses offering a 3.6% return and units providing a 4.2% return. The low vacancy rate of 1.3% further emphasizes the strong rental demand.
Tarneit has seen remarkable improvements in public transport and local amenities. Continuous development in these areas ensures Tarneit remains convenient for residents, with easy access to schools, shopping centers, and parks.
Affordable property prices in Tarneit make it an attractive choice for first-time buyers and investors. With a balance of affordability and growth potential, the suburb caters well to varying budget requirements.
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9. Werribee
Werribee is an attractive option for property investment in Melbourne. It is located about 32 kilometers southwest of the Melbourne central business district. This suburb provides a mix of affordability and potential growth.
One of the big draws to Werribee is the affordable housing market. The area has a range of properties that cater to different budgets.
Werribee also offers a good quality of life with its numerous parks and leisure facilities. The Werribee Park and Mansion, along with the Werribee Open Range Zoo, contribute to the area’s appeal.
Public transport links are well-developed, including train services that connect Werribee to Melbourne city.
Demand for rental properties in Werribee is steady. This is driven by the suburb’s facilities and transport links, which attract families and young professionals.
10. Wollert
Wollert is an up-and-coming suburb located about 26 kilometers north of Melbourne’s Central Business District. This area is rapidly developing. If you’re looking for a place with new infrastructure and growing amenities, Wollert might be attractive to you.
The suburb offers a mix of modern housing and new developments. Property prices here tend to be more affordable compared to inner-city suburbs. This makes Wollert a good choice if you’re on a budget but still want to invest in Melbourne’s real estate market. Besides, rental yields in Wollert are competitive.
Wollert’s development plans include more schools, parks, and shopping facilities, which aim to improve quality of life. If you’re considering family-friendly suburbs, these upcoming amenities could be very appealing.
Accessibility to public transport is another feature being improved in Wollert. Future transport projects aim to make commuting easier, which could boost property values and demand in the coming years.
Why is the Melbourne Real Estate Market Expected to Grow in 2025?
Investing in Melbourne’s real estate market offers opportunities thanks to well-planned urban development and demographic trends. Focusing on infrastructure and increasing population supports long-term property value growth.
If you are ready to go ahead with a property purchase in Melbourne, then read my blog post on how to avoid losing money when making international money transfers.
Urban Development Plans
Melbourne’s urban development plans are key to ensuring sustainable growth. Significant projects aim to improve infrastructure and connectivity. For example, expanding public transport like new train lines and bus routes enhances accessibility. Road networks are also being widened to ease traffic congestion.
Investments in commercial and residential areas bring more jobs and amenities. This makes suburbs more attractive to new residents and investors. Local governments prioritize creating green spaces and parks for recreational purposes. These efforts boost property appeal and contribute to long-term growth opportunities in these suburbs.
Population Growth Forecasts
Population growth projections for Melbourne are promising. Suburbs are expected to see an increase in inhabitants, driving demand for housing. More people moving into the area means a need for additional housing, schools, and healthcare facilities.
Younger families and professionals are choosing Melbourne for its quality of life and job prospects. Demographic shifts include an influx of immigrants, contributing to a multicultural community. This growth positively impacts real estate, as demand for both purchase and rental properties rises. Suburban areas with higher anticipated growth will likely experience stronger appreciation in property values, making them attractive to investors.
Suburbs in Melbourne: FAQs
What are the most affordable suburbs in Melbourne to buy an investment property?
Pakenham is noted for its lower median house price of $590,000, making it a budget-friendly choice for investors. Suburbs like Coburg also offer affordable options with potential for growth due to their proximity to the city and ongoing development. Melton West is another area that is affordable and up-and-coming.
Which Melbourne suburbs offer the highest rental yield for investors?
Units in Melbourne generally provide better rental yields compared to houses. As of March 2024, the rental yield for units in Melbourne was around 5.8%, higher than houses at 3.6%. Suburbs such as Pakenham, with a rental return of 4.2%, are attractive for steady income. Melton West offers 4 to 4.5% rental yields and continues to show rent growth. Other suburbs with high rental yields are the above mentioned Carlton, Bentleigh, Glen Waverley, and Mitcham.
Which suburbs are predicted to experience significant growth in Melbourne by 2025?
Suburbs such as Glen Waverley and Bentleigh are expected to grow due to ongoing development and investment in amenities. Blackburn, with its abundance of local amenities and attractions, as well as Essendon, McKinnon, and Coburg also show potential for capital growth.
Which undervalued suburbs in Melbourne present good investment opportunities?
Pascoe Vale and other emerging suburbs like Ascot Vale offer promising opportunities for investment. These areas are gaining popularity among buyers for their affordability and improving infrastructure. Other undervalued areas are Werribee, St Albans, Croydon, Sunshine, Reservoir, and Melton.
What are the safest suburbs in Melbourne?
Suburbs like Bentleigh and Glen Waverley are often considered safe with strong community ties and low crime rates. Ascot Vale and Heatherton are also known to be safe and very family friendly with lots of green, family-friendly amenities, and good schools.
Final Thoughts on the Top 10 Best Suburbs to Invest in Melbourne in 2025
Choosing the best suburb in Melbourne to live or invest in, can feel overwhelming. The list above can provide you with some guidance before you reach out to local real estate agents and dive into the property search. Let me know if you have any comments or experiences in any of the suburbs mentioned above. Email me on wouter@propertyinvestblog.com.
