Affordable Suburbs Drive Demand: Is Melbourne Next in Line for a Housing Boom?
Affordable Suburbs Lead the Way in Price Growth
Bargain-hunting buyers have made waves in Australia’s housing market, flocking to affordable suburbs and sparking dramatic price increases in some unexpected areas. Recent data from PropTrack reveals that affordability has become the top priority for buyers navigating today’s challenging real estate landscape, pushing property values in budget-friendly areas to record heights.
With Melbourne’s outer suburbs and regional towns boasting similar affordability and lifestyle appeal, the question arises: could these areas be poised for a similar surge?
In 2024, some of the most dramatic property value increases occurred in suburbs like Vincent in Townsville (up 39%) and Rangeway in Western Australia’s Geraldton (up 47.6%). Despite these spikes, these suburbs remain some of the most affordable in the country, with median house prices below $500,000.
Even Melbourne has its affordable gems. Suburbs like Coolaroo and Dallas recorded growth rates of up to 5%, maintaining their reputation as budget-friendly options with median prices below $550,000. Outer-northern and eastern suburbs such as Cranbourne South and Junction Village also saw steady growth, making them attractive for families and first-home buyers.
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Why Are Affordable Suburbs Booming?
The rise in property values across Australia’s affordable suburbs can be attributed to several factors:
- Interest Rate Pressures: High interest rates have reduced borrowing power, forcing many buyers to reconsider pricier suburbs.
- Population Shifts: Migration to regional areas like Queensland has accelerated since the pandemic, driving demand in locations like Townsville and Gladstone.
- Investor Activity: Suburbs with high rental yields, like those in Townsville, have drawn significant investor interest, further driving up prices.
For Melbourne buyers, suburbs such as Braybrook and Maidstone are gaining traction as affordable and convenient alternatives to city living. With excellent transport links, schools, and amenities, these suburbs offer the lifestyle many buyers seek without breaking the bank.
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Spotlight on Melbourne’s Market
Melbourne’s affordability compared to other capital cities has kept it on buyers’ radars. While price growth in Melbourne has been modest, high listing volumes have provided buyers with more choice, keeping demand steady. For example:
- Coolaroo and Dallas: These suburbs are some of Melbourne’s most affordable, with homes selling for under $550,000.
- Cranbourne South and Junction Village: Offering family-friendly living at a fraction of the price of inner-city suburbs, these areas remain highly sought-after.
With Melbourne now more affordable than Adelaide, could 2025 mark a turnaround for Victoria’s capital?
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What to Expect in 2025
While interest rates may stabilise, experts predict only modest price growth this year. However, with affordability driving demand, Melbourne’s outer suburbs and regional towns are expected to stand out. Regions like Shepparton and Echuca, which recorded the state’s highest unit price growth in 2024, could continue to attract buyers looking for affordability and value.
Key Trends to Watch:
- Increased competition in affordable markets as more buyers enter the fray.
- A continued rise in investor activity, particularly in high-yielding suburbs.
- Potential growth in Melbourne’s affordable outer suburbs and regional hotspots.
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Why Act Now?
Whether you’re buying your first home or investing, affordability is the key to success in 2025’s property market. With demand driving price growth in Australia’s most affordable areas, now is the time to act before prices climb higher.
Let Create Real Estate help you find the perfect property in Melbourne’s growing suburbs. Our experienced team can guide you through the process, whether you’re buying, selling, or investing.