From Melton and Frankston to Broadmeadows, Melbourne’s most affordable suburbs were home to the city’s top growth in 2025.
Melbourne’s battler ‘burbs dominated the city’s best performing property markets in 2025, with median house values surging six figures in some of its once affordable pockets.
But with hundreds of sub-$1m suburbs and towns across the state facing price hikes of at least $20,000 in the final three months of the year, experts have warned the expansion of the federal government’s First Home Guarantee has already significantly driven up home prices.
Frankston North topped the list of the year’s top performing areas, with a whopping $112,000 (20 per cent) increase in typical prices to $689,000 in the past 12 months.
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In less than a year, the once affordable neighbourhood’s typical houses have eclipsed the threshold for the state government’s $600,000 cap for no stamp duty payments.
It was followed by Coolaroo, up $100,000 (19 per cent) to $627,000, and Dallas, which gained $90,812 (17 per cent) and now has a $626,000 median house price.
Even the city’s most affordable suburb, Melton, has had an almost $80,000 increase (17 per cent) with typical homes now costing $548,000.
It’s the first time in years that the city’s top performing suburbs list has been exclusively the domain of areas known for poor reputations, and reflects changing demographics in the once affordable areas that are increasingly sought out by families and young buyers.
None of the city’s top ten performing markets had median values above $1m, and higher value suburbs are expected to continue to notch slower gains than those with prices below $950,000 in the year ahead.
PropTrack economist Anne Flaherty said there were multiple factors behind the affordable areas’ high growth, but one had “definitely” been the October expansion to the First Home Guarantee which allows people to buy homes with a 5 per cent deposit.
This 11 Norfolk Cres, Frankston North, home shows what you get for $655,000-$720,500 today.
A three-bedroom Melton South home at 74 Expord Rd has been listed for sale at $499,000-$548,000, and is one of the more affordable house listings in Melbourne.
While it was too soon to say what the exact price impact had been, Ms Flaherty said there was “already some very strong indications that it has contributed to price growth”.
Many of the affordable areas in the annual best performers list were also high up on the top performances of the final three months of the year, with Dallas, Campbellfield, Frankston North, Frankston, Coolaroo, Meadow Heights and Melton South among those notching 6-7 per cent growth from September to December.
That timeline coincides with the First Home Guarantee’s expansion, when income caps were removed and purchase price caps raised to $950,000 in Melbourne.
The PropTrack data shows that 220 Victorian towns and suburbs which had median house values below $1m in September last year have since gained at least $20,000, with some surging up to $75,000 in the aftermath of the changes.
Another 86 areas recorded similar cost increases for units.
Melbourne’s Top Suburbs For House Value Growth
Frankston North: $689,000 — up $112,148 (20%)
Coolaroo: $627,000 — up $100,405 (19%)
Dallas: $626,000 — up $90,812 (17%)
Melton: $548,000 — up $78,379 (17%)
Meadow Heights: $662,000 — up $93,453 (17%)
Campbellfield: $707,000 — up $99,841 (16%)
Frankston: $835,000 — up $113,352 (16%)
Carrum Downs: $791,000 — up $106,472 (16%)
Broadmeadows: $655,000 — up $87,772 (15%)
Melton South: $560,000 — up $71,652 (15%)
Shows median house value growth across 2025
Source: PropTrack
With more first-home buyers likely to engage with the scheme in coming months, the economist added that it was a key reason why Melbourne’s affordable markets were likely to outperform again in 2026.
“Under the $950,000 cap, and maybe a bit below that, is the segment that will see the strongest growth,” Ms Flaherty said.
“We do expect prices to rise across the board in most suburbs, but with the risk of interest rate increases or them not coming down, the level of growth in more expensive suburbs will be a bit lower than last year.”
Ms Flaherty added that interstate and local investors competing with first-home buyers would also be a factor in the rising home values of more affordable areas across the city, with Australian Bureau of Statistics data showing the value of loans to them had risen year on year across Victoria.
42 Stewart Grove, Campbellfield, has a $700,000-$750,000 asking price in one of Melbourne’s top performing suburbs for 2025.
55 Bradman Drive, Meadow Heights, is listed for $670,000-$705,000 in an area that’s been popular with first-home buyers and investors.
Buyer’s advocate Miriam Sandkuhler said the growth stats were a sign the federal government’s uncapped expansion to the 5 per cent deposit scheme had simply driven up prices.
But the author and property adviser warned that with the possibility of rate hikes back on the table in 2026, first-home buyers who had used the scheme in some of the areas that had surged could find themselves at risk of owing more than their home was worth if the market corrected back down again in the near future.
“The government’s 5 per cent deposit scheme has had an effect,” Ms Sandkuhler said.
“Every economist under the sun has repeatedly said that to the government, but they’ve been deaf.
“And it is encouraging people to buy a property that they otherwise may not have been able to. Depending on the timing of when people are buying into the market, if there’s any significant correction, they can end up with negative equity very quickly.”
Realestate.com.au economist Anne Flaherty said government support for first-home buyers was “definitely” a factor in rising home prices.
15 Pebble Beach Drive, Carrum Downs, is for sale at $795,000-$870,000 in a suburb that attracted serious buyer demand in 2025.
While some of the top performing areas, like Frankston and Frankston North, had a lot going for them, others more affordable regions were likely being driven up by “a lot of inexperienced people” — many of them first-home buyers and investors.
Despite those concerns, she noted there was still strength in the market andgrowth should continue until at least until an increase in interest rates.
“The market has been recovering over the past 12 months, the bottom of the market for Melbourne was in January-February last year,” Ms Sandkuhler said.
Melbourne’s Top Suburbs For Unit Value Growth
Wheelers Hill: $937,000 — up $248,637 (36%)
Frankston South: $790,000 — up $143,657 (22%)
Caulfield South: $848,000 — up $116,970 (16%)
Dallas: $503,000 — up $69,168 (16%)
Campbellfield: $455,000 — up $60,628 (15%)
Chelsea Heights: $780,000 — up $101,744 (15%)
Broadmeadows: $523,000 — up $64,334 (14%)
Meadow Heights: $539,000 — up $66,098 (14%)
Hastings: $574,000 — up $69,688 (14%)
Jacana: $541,000 — up $64,691 (14%)
Shows median unit value growth across 2025
Source: PropTrack
Northern suburbs-based Mortgage Choice broker Max O’Sullivan said most first-home buyers in the regionaround Broadmeadows were using the First Home Guarantee, or getting family support.
Other core buying groups also included small families upgrading from units to houses in the affordable suburbs.
“The entry point around $600,000-$650,000 for a townhouse or house is still achievable, especially compared to suburbs closer in like Preston or Reservoir where they’d be looking at units instead,” Mr O’Sullivan said.
He added that with rental returns around 4 per cent or better in the area, it was also attractive to investors.
Frankston-based OBrien Real Estate agent Mark Burke said the 20 per cent growth in Frankston North had been a genuine uptick, and he would soon be listing a home for more than $100,000 above what he sold it for in February last year.
A $795,000-$874,500 budget is now needed for homes like 10 Oban St, Frankston, after the suburb surged in 2025.
1 Ebden Court, Broadmeadows, is also the beneficiary of major value growth, with an expected sale in the range of $650,000-$710,000.
“A lot of the growth last year was interstate investors, but with that increase in price the homes are getting too dear now — so we won’t see as many of them this year,” Mr Burke said.
He’s tipping a 3-4 per cent increase for the suburb in 2026, but noted four-bedroom houses with an ensuite, and a character-brick facade would likely attract the best sales.
“And if they add a new kitchen and bathroom, they are the ones that have really outperformed,” Mr Burke said.
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