Perth, Brisbane and Adelaide rose between 64% and 80% over the last five years. Melbourne went the other way. Its values fell 3.9% over the same stretch, and investors left too after the land tax changes.
Investors leaving meant fewer rentals. Falling prices meant fewer buyers. Vacancy across the ten postcodes below runs from 1.25% to 5.50% (SQM Research, August 2026). The Metro Tunnel has run a full timetable since 1 February 2026. It joins Sunbury to Cranbourne and Pakenham straight through the CBD. Victoria added about 109,000 residents in the year to March 2026.
None of the suburbs that follow are in Toorak or South Yarra. They are outer and middle ring. Five of the ten still buy an established house on a real block under $700,000. Gross yields across the list run from 3.70% to 4.12%.
Why Melbourne, why now
Queensland, WA and South Australia have had five or six years of it. Plenty of their suburbs have doubled. There is probably more in them.
But the risk on a purchase changes once most of the run is behind you. Victoria has not had the run.
Melbourne’s median dwelling value is $786,718 and the median house is $920,432, on Cotality’s Home Value Index to 31 August 2026. Values fell 1.1% over the month, 3.9% over the quarter and 4.7% across the year.
The number that matters most is older than any of those. Melbourne’s peak was March 2022, and values sit 6.8% below it. Sydney, Brisbane, Adelaide and Perth all set new highs in 2026. So the price base you are buying against was set four years ago, against less competition and tighter rental demand than the markets that ran.
Our guide to capital growth vs rental yield goes into how the two work together across a portfolio.
What we’re looking for in Melbourne
We look for established houses on decent blocks with something to do to them. That rules out new builds and house-and-land on the development fringe. An older property gives you levers a new one does not. You get a cosmetic renovation, a granny flat later and no developer margin already sitting in the price.
The ten suburbs below cover four corridors. We chose them on median, yield, vacancy, infrastructure pipeline and how spread the local employment is. A 4% yield resting on one big employer is not the same 4% as one behind health, education, retail and government.
Melton
Median house price: $565,000 Computed gross yield: 3.77% Median weekly rent: $410 12-month growth: +16.49% Five-year average: +6.11% a year House sales, 12 months: 177, selling in 22 days Vacancy: 2.68% in postcode 3337, from 3.13% in April
Melton is the most affordable of the ten suburbs here.
At $565,000 you are getting an established house on land for under what a lot of middle-ring units cost. The yield computes at 3.77%, second lowest of these ten. Melton’s case is growth rather than cash flow. The jobs sit around the Melton Health precinct, Woodgrove shopping centre and the industrial and logistics belt along the Western Freeway.
Growth ran 16.49% over the year, the strongest of these ten. The five-year average of 6.11% a year is also the strongest here. Buy in the established parts of Melton rather than the estates on the edge. That’s where you get the land size, the renovation upside and a walk to anything.
If $500,000 is a hard ceiling, a Melton house is out of reach. Units become the conversation instead. We have costed that out in best suburbs to invest in Melbourne under $500k.
Werribee
Median house price: $660,000 Computed gross yield: 3.70% Median weekly rent: $470 12-month growth: +6.97% Five-year average: +4.10% a year House sales, 12 months: 1,056, selling in 27 days Vacancy: 1.74% in postcode 3030, from 1.90% in April
Werribee already has what most growth suburbs are still waiting for. There’s Werribee Plaza, Mercy Hospital and an employment precinct along the Princes Freeway that is filling out year by year. It is a hub, not a commuter dormitory.
The Metro Tunnel did not touch Werribee’s own line. Anyone telling you otherwise is stretching it. What did help was the network restructure around it. The Frankston line went back to the City Loop, which took pressure off the routes Werribee commuters use.
Growth of 6.97% is middling for this list. At 3.70%, the yield is the lowest of the ten, but vacancy at 1.74% keeps the holding numbers steady. The 1,056 house sales in twelve months make it the deepest market here. The older houses around the town centre and station sit on blocks where a cosmetic renovation still adds real value.
Wyndham Vale
Median house price: $610,000 Computed gross yield: 3.84% Median weekly rent: $450 12-month growth: +3.39% Five-year average: +3.85% a year House sales, 12 months: 649, selling in 31 days Vacancy: 5.50% in postcode 3024, from 5.75% in April
The station is the argument here. Wyndham Vale has its own stop on the Regional Rail Link. That means a direct run into Southern Cross rather than a change or a bus.
The suburb sits between Werribee and the newer land further west. It has inherited the better half of that position, with schools, shops and sporting facilities already built. The tenants are mostly families, which shows up as longer leases and fewer letting fees.
The numbers need saying plainly. Wyndham Vale has the loosest vacancy of these ten at 5.50% and the weakest twelve-month growth at 3.39%. It is also the only one of the ten whose last year ran behind its own five-year average of 3.85%. The other nine are all speeding up.
Set against that, vacancy is down from 7.18% in March. The 649 house sales in twelve months are real depth for a suburb this size. At $610,000 the yield computes at 3.84%, a little ahead of Melton’s 3.77%, for $45,000 more up front. You would need a specific reason to buy Wyndham Vale. That reason is the station.
The suburb also borders development areas that are still releasing stock. Stay in the established pockets near the station and the schools. Buy the older houses with the bigger blocks.
Broadmeadows
Median house price: $660,000 Computed gross yield: 3.94% Median weekly rent: $500 12-month growth: +10.00% Five-year average: +2.92% a year House sales, 12 months: 159, selling in 29 days Vacancy: 1.25% in postcode 3047, from 1.38% in April
Broadmeadows is fifteen kilometres from the CBD, with a station on the Craigieburn line and a median of $660,000. It has been unfashionable for a long time. The price carries the discount for it.
One thing is working on that discount. The Suburban Rail Loop, years off as it is, names Broadmeadows as a station. That kind of thing moves land values long before a train arrives.
A 3.94% yield at that distance from the city keeps the holding costs sensible while you wait. Growth of 10.00% over the year is second only to Melton on this list. It suggests the market has started noticing. Vacancy at 1.25% is the tightest of these ten.
Craigieburn
Median house price: $723,000 Computed gross yield: 3.96% Median weekly rent: $550 12-month growth: +6.32% Five-year average: +4.29% a year House sales, 12 months: 1,033, selling in 30 days Vacancy: 3.67% in postcode 3064, up from 3.52% in April
Craigieburn is the dearer of the two northern-corridor suburbs here. Its 6.32% over the year is third from the bottom of these ten.
It is a solid family suburb. It has Craigieburn Central for retail and plenty of schools, sport and healthcare. There’s also a station on the Craigieburn line with a direct run to town. Tenant demand from families is dependable and long-term.
Where it needs care is property selection, more than most. We compute the yield at 3.96%. Vacancy at 3.67% is the second loosest of these ten. The property and the rental appraisal decide your outcome here, not the suburb. Newer parts of Craigieburn are small-lot and higher density. Target the established pockets on 500sqm or more, where a renovation or a future subdivision is still possible. Leave the estates where stock is still being added.
Cranbourne
Median house price: $723,500 Computed gross yield: 3.95% Median weekly rent: $550 12-month growth: +7.97% Five-year average: +5.07% a year House sales, 12 months: 383, selling in 17 days Vacancy: 1.48% in postcode 3977, up from 0.97% in April
Read the postcode carefully on this one, because Cranbourne is really several markets.
Core Cranbourne, postcode 3977, is the one to buy: older housing stock, bigger blocks, walkable to the station. Cranbourne East, West and North are not, at least not now.
In the core, the fundamentals are straightforward. The Metro Tunnel now runs the Cranbourne line through the CBD without a loop change. Commutes shortened as a result. Cranbourne Park Shopping Centre, Casey Hospital and the logistics corridor along the South Gippsland Highway carry the local jobs. At $723,500 the yield computes at 3.95%. The five-year average of 5.07% a year is the second strongest of these ten, behind Melton. Houses sell in 17 days, which is among the fastest here.
Pakenham
Median house price: $720,000 Computed gross yield: 4.12% Median weekly rent: $570 12-month growth: +7.46% Five-year average: +4.95% a year House sales, 12 months: 980, selling in 14 days Vacancy: 1.41% in postcode 3810, up from 0.82% in April
Pakenham is where the Metro Tunnel’s south-eastern reach ends. The line runs through the new CBD tunnel stations now instead of feeding into the City Loop. For a suburb this far out, that is a real change rather than a marginal one.
The town centre has its own station and retail, and the population corridor keeps extending toward Officer and Cardinia. Cardinia Shire grew 2.6% in the year to June 2025, eighth fastest of Victoria’s 80 councils.
Pakenham has the highest computed yield of these ten at 4.12%. It also has the fastest selling time, at 14 days. Vacancy rose to 1.41% from 0.82% in April, still the third tightest here. The approach is Cranbourne’s. Buy the established streets around the town centre and station, where houses commonly sit on 600sqm or more. The estates further out carry smaller lots and more supply still to come.
Dandenong
Median house price: $780,000 Computed gross yield: 3.80% Median weekly rent: $570 12-month growth: +4.00% Five-year average: +3.40% a year House sales, 12 months: 167, selling in 31 days Vacancy: 1.31% in postcode 3175, from 1.81% in April
Vacancy in Dandenong is 1.31%, second tightest of these ten behind Broadmeadows. That is the single best reason to look at it. The jobs behind it are genuinely spread across Dandenong Market, Dandenong Hospital and the Dandenong South industrial precinct. No one sector can take the suburb down on its own.
Dandenong is also the most expensive of these ten at $780,000. At 3.80% it will not cover its own holding costs. This is a growth position. It makes sense if you already hold yield somewhere and what the portfolio needs next is equity in Melbourne’s south-east.
Sunbury
Median house price: $720,000 Computed gross yield: 3.97% Median weekly rent: $550 12-month growth: +7.78% Five-year average: +2.87% a year House sales, 12 months: 894, selling in 15 days Vacancy: 2.63% in postcode 3429, from 3.18% in April
Until February, Sunbury was a semi-regional commuter town 38 kilometres north-west of the city. Its connection into town was awkward. Now the Sunbury line runs continuously through the Metro Tunnel and out the other side to Cranbourne and Pakenham.
On paper that is a different suburb to the one that existed a year ago. The 7.78% over twelve months is the market saying so. Sunbury has its own town centre rather than borrowing someone else’s. It also has good schools, established retail and the kind of community feel that keeps family tenants in place for years. The yield computes at 3.97%.
Vacancy is 2.63%, the fourth loosest of these ten. Keep an eye on building approvals. Enough new stock can slow growth in a suburb like this. The established core is the safer half of Sunbury to be in.
Bacchus Marsh
Median house price: $650,000 Computed gross yield: 4.00% Median weekly rent: $500 12-month growth: +8.33% Five-year average: +3.44% a year House sales, 12 months: 177, selling in 20 days Vacancy: 1.71% in postcode 3340, up from 0.81% in April
Bacchus Marsh grew 8.33% over the year, third strongest of these ten, off a five-year average of only 3.44% a year.
It is 49 kilometres north-west on the Western Freeway, technically in Moorabool Shire, and it behaves like its own town rather than an outer suburb. At $650,000 a house pays 4.00%, the only one of these ten under $700,000 that still reaches 4%. In the older streets near the main street precinct and the Avenue of Honour, those houses often sit on 700sqm or more.
The real problem is the commute. Bacchus Marsh leans on the Western Freeway, where congestion is a known issue. If your tenant works in Melbourne, that is their daily reality. Local employment offsets it, including Djerriwarrh Health Services and the Bacchus Marsh Grammar precinct. The population moving in regardless does too.
A five-year average of 3.44% with the last year at 8.33% says the market has only just turned. Rising population behind that is the shape Perth’s affordable suburbs had before they ran. Nothing guarantees Bacchus Marsh repeats it, but that is the pattern.
The quick comparison
| Suburb | Median price | Yield | 12m growth | 5yr average | Vacancy | Key driver |
|---|---|---|---|---|---|---|
| Melton | $565,000 | 3.77% | +16.49% | +6.11% | 2.68% | Most affordable, fastest growth |
| Werribee | $660,000 | 3.70% | +6.97% | +4.10% | 1.74% | Western hub, Mercy Hospital |
| Wyndham Vale | $610,000 | 3.84% | +3.39% | +3.85% | 5.50% | Regional Rail Link, weakest growth |
| Broadmeadows | $660,000 | 3.94% | +10.00% | +2.92% | 1.25% | Urban renewal, SRL node |
| Craigieburn | $723,000 | 3.96% | +6.32% | +4.29% | 3.67% | Northern hub, family corridor |
| Cranbourne | $723,500 | 3.95% | +7.97% | +5.07% | 1.48% | Metro Tunnel, south-east hub |
| Pakenham | $720,000 | 4.12% | +7.46% | +4.95% | 1.41% | Metro Tunnel, best yield |
| Dandenong | $780,000 | 3.80% | +4.00% | +3.40% | 1.31% | Activity centre, spread employment |
| Sunbury | $720,000 | 3.97% | +7.78% | +2.87% | 2.63% | Metro Tunnel, semi-regional |
| Bacchus Marsh | $650,000 | 4.00% | +8.33% | +3.44% | 1.71% | Large blocks, 4% under $700,000 |
Melbourne’s cycle is the opportunity
Melton at $565,000 and Dandenong at $780,000 do two different jobs. Ranking one above the other misses the point.
Say your borrowing capacity is tight and the property has to sit near neutral from the first month. Pakenham pays the most on this list at 4.12%, with the third tightest vacancy behind it. Bacchus Marsh at $650,000 is the only one under $700,000 still reaching 4.00%.
Maybe you have the income to carry a shortfall and the portfolio needs equity more than rent. Then look at the Metro Tunnel suburbs, Sunbury, Cranbourne, Pakenham and Dandenong. All four had their connectivity improve inside the last twelve months. None of that was priced in a year ago.
Behind both is the same case. Melbourne has trailed Perth, Brisbane and Adelaide for five years. That lag is what you are buying. The things underneath it are not forecasts. Vacancy sits under 2% in six of these ten postcodes. Victoria added about 109,000 residents in the year to March 2026. The Metro Tunnel is open and running, and the price base is still under the March 2022 peak.
Be clear-eyed about the timing though. Buying an established house in these suburbs today means buying a market that is still falling rather than one that is running. There is no competition and no urgency. Nothing confirms the floor is in, either. What you are paying for is a price set four years ago.
If you are buying interstate into Victoria, get a buyers agent who knows Melbourne street by street. That is what separates a well-placed asset from one that reads well on paper and sits in the wrong pocket. Our case studies show how that selection has gone for clients.
Where these numbers come from
Suburb medians, twelve-month growth, five-year average growth, house sales and days on market are CoreLogic data via Your Investment Property, to 30 June 2026. Median weekly rents are to 31 August 2026.
Gross yields are computed by us as weekly rent times 52 divided by the median. We do not use published yield columns, because they mix reporting periods and will not reconcile against the median and rent shown here.
Vacancy rates are SQM Research for August 2026, quoted by postcode, with the April 2026 reading beside each one. All suburb figures were pulled on 26 September 2026. The Melbourne-wide dwelling and house values and the five-year changes are Cotality’s Home Value Index at 31 August 2026. Victoria’s population growth is ABS estimated resident population to March 2026, and Cardinia’s is ABS to June 2025.
This is general information only and not financial advice. Speak to a qualified professional before making investment decisions.
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