How Victorian first‑home buyers are navigating cost-consciousness in today’s market

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Victorian first-home buyers are thinking outside the box to find homes that suit their budget.

With home prices on the rise across Australia, first-home buyers in Victoria are feeling the crunch when it comes to cost-of-living and increasing economic uncertainty.

“Even though Melbourne is now one of the most affordable capital cities in the country, that does not mean it’s easy for first-time buyers to get into the market,” says REA Group senior economist Anne Flaherty.

“We’ve seen that prices have grown more quickly than most people’s wages, and we know that when people are looking to borrow, even if they have enough deposit, sometimes they can be constrained perhaps by their income level.”

With this in mind, first-home buyers are making smarter choices and looking for new opportunities that will get them on the property ladder sooner and with less compromise.

How smart buyers are cutting costs without sacrificing lifestyle

Beyond just the sticker price, buyers are looking at ways they can get more for their money.

New homes, for example, have become a more appealing option, with realestate.com.au data showing that the number of buyers looking to build or purchase a new home hit a four-year high this year.

A key reason why building new is increasingly seen as a smarter move, especially among first-home buyers, is the recent expansion of first-home buyer incentives like the Australian Government’s 5% Deposit Scheme and Help to Buy Scheme.

“These sit alongside existing state-based incentives to buy new, such as stamp duty concessions and first home-owners grants, which are often more generous for new homes than established,” Ms Flaherty said in a recent analysis of this trend.

These new homes also allow Victorian buyers to take advantage of the state’s growth corridors, where prices are comparatively lower.

Melbourne's northern and western corridors have seen major population and infrastructure growth in recent years, while still enjoying a more attainable price point.

According to PropTrack’s May Home Price Index, the North-East Melbourne, North-West Melbourne and West Melbourne SA4 regions (as defined by the ABS), which sit within these growth corridors, had median home prices of $841,309, $764,444 and $710,660 respectively.

This was lower than Melbourne's overall median of $846,000 and the national median of $909,000.

At the heart of these growth corridors are the masterplanned communities that not only have the opportunities that first-time buyers are looking for but also have the amenities that mean they’re not sacrificing on lifestyle.

One of the largest developers of masterplanned communities in Victoria is Stockland, with 18 such communities across the state.

Faiyaz Aslam, State Sales Manager said Stockland is focused on providing new home options for all buyer types and budgets.

“Across our masterplanned communities, we’re creating connected, vibrant places that cater to a wide range of buyers, with a mix of housing, amenity and infrastructure to support how people want to live," he says.

“Many buyers are drawn to masterplanned communities because of the range of housing options available in one place. It means they can get into the market in a way that suits their budget now, and often stay within the same community as their needs change over time.”

Why a new townhome could be a smart move right now

Townhomes have become an increasingly appealing option to budget‑savvy buyers, particularly first‑home buyers deciding between an apartment and a house.

“Townhomes have really emerged as a very popular entry point to the market, particularly for first-time buyers,” says Ms Flaherty.

“They are typically significantly cheaper than purchasing a house and land package, but at the same time they offer more space and often more privacy compared to apartments.”

That combination makes townhomes a compelling alternative to apartment living, offering multiple bedrooms and more living space, without sacrificing proximity to amenity.

Ms Flaherty highlights that they make a great option for property seekers who know they want to buy in a particular suburb and need the added space, but can’t quite afford a stand‑alone house.

Many new townhomes are delivered as a full turnkey product, with a fixed upfront price and no unexpected build costs, allowing buyers to simply turn the key and move straight in.

A range of designs are also available, including two-, three- and four‑bedroom layouts, double‑storey and reverse‑living designs, and rear‑loaded homes that maximise lot efficiency.

“From first-home buyers to downsizers to upgraders, townhomes in masterplanned communities offer broad appeal, delivering a balance of affordability and lifestyle,” says Mr Aslam.

“They're designed for how people want to live today, with efficient use of space and layout, strong energy ratings, and considered design.”

Often positioned in premium locations within masterplanned communities, townhomes can be closer to parks, green spaces and local amenities, helping to offset smaller backyard sizes.

“One of the benefits of buying into a masterplanned community is that you're not just buying a property, you're actually buying into a community itself,” says Ms Flaherty.

Buyers often have greater visibility over what is planned in the community, from schools and parks to future amenities, and how those lifestyle elements will grow with the community over time.

Turning cost-conscious thinking into a plan

In a market where affordability is top of mind, making the jump from budgeting to buying can feel like a big step.

For many first-home buyers, townhomes are increasingly part of that equation, offering a more accessible entry point without stepping away from the locations and lifestyle they’re looking for.

The challenge, however, is knowing where to start – from understanding how much they can afford to deciding what matters most.

Mr Aslam says building confidence begins with getting clear on both your budget and priorities.

“Start by understanding what you can comfortably afford, and what matters most to you. For many buyers, that’s where townhomes come into the conversation, because they offer a way to balance those priorities without stretching too far," he says.

“Taking the time to explore different communities and understanding how they will evolve over time can also help buyers make more informed decisions. At Stockland, we’re seeing more first-home buyers turn to townhomes as a smart way to enter the market, balancing affordability with access to well-connected, amenity-rich communities."

With a range of government schemes designed to help first-home buyers enter the market, it’s also important to research the different type of support that's available to help make budget go further.

As buyers become more informed and begin to narrow their options, having access to a knowledgeable team can provide additional guidance through the process.

“Buying your first home can feel daunting, but having support to guide you through your options – from that initial walk into the office all the way through to settlement – can make it much more manageable” Mr Aslam said.

By taking a considered approach and seeking guidance from experts, first-home buyers can move forward with greater confidence, and for many, that process leads them to townhomes as a way of balancing affordability, space and lifestyle.

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