Property Axis Bayside, Peninsula and Inner South East
WHERE DATA MEETS DIRECTION
OBRIEN REAL ESTATE IS A LEADING VICTORIAN AGENCY NETWORK WITH DEEP EXPERTISE ACROSS MELBOURNE. WE COMBINE RIGOROUS DATA ANALYSIS WITH ON‑THE‑GROUND MARKET KNOWLEDGE TO HELP INVESTORS MAKE CONFIDENT DECISIONS.
A GUIDE TO PROPERTY TRENDS, MARKET MOVEMENTS,AND INVESTMENT INSIGHTS ACROSS MELBOURNE’S BAYSIDE , PENINSULA & INNER SOUTH EAST.
Melbourne’s Bayside, Peninsula and Inner South East corridor offers a rare blend of coastal lifestyle, blue-chip school zones and a pipeline of public investment that is quietly reshaping long-established suburbs.
Median house prices already command a premium, yet several pockets, from Aspendale Gardens to Seaford, still trade 50 60 per cent below Brighton and Black Rock while sharing the same beaches, rail line and café culture. Over the next decade three structural forces will determine ascendancy in performance.
The first, infrastructure: the Suburban Rail Loop East terminus at Cheltenham, continuous grade separations along the Frankston line and the $1.1 billion Frankston Hospital redevelopment will compress commute times and lift white collar day time populations.
The second, demographic uplift: ABS projections show a higher tertiary educated cohort moving south east as remote work prioritises space and coastal amenity; vacancy rates across our target suburbs average just 1.4 per cent, underpinning rental growth above the metro median.
The third, supply scarcity: strict height limits along the foreshore and heritage overlays in Brighton, Beaumaris and Elwood cap new stock, while green field land is exhausted.
For investors, this creates a split of opportunity: established prestige suburbs where capital preservation and renovation upside dominate, and “next wave” locations, Carrum, Edithvale, Patterson Lakes, where infrastructure and gentrification are compressing the price gap. Combined with robust school zones, demand and a maturing “build to rent” sector in Cheltenham, Highett and St Kilda, the Bayside arc is set to deliver resilient yields and above trend capital appreciation through the 2026 2035 cycle.
SRL East is the first stage of the project being delivered from Cheltenham to Box Hill, with 26 kilometres of twin tunnels connecting six new underground stations. Thoughtful planning for the broader neighbourhoods around each SRL East station will enable around 70,000 new homes to be built in these areas by the 2050s, on the doorstep of world class public transport, services and jobs.
The new rail line will connect major employment, health, education and retail destinations in Melbourne’s east and south east, slashing travel times and connecting passengers travelling on the Gippsland corridor to destinations across Melbourne.
The redevelopment of the Frankston Hospital will transform its services, delivering a new tower with 12 levels with a helicopter pad, 130 more beds, and new spaces for mental health and oncology services and 15 new operating theatres. Once finished, (due for completion in late 2025, and open to the public in early 2026), the redeveloped hospital will have the capacity to treat approximately 35,000 more patient episodes each year.
Axis applies a five‑pillar framework to identify they drivers of growth.
1. Infrastructure Development
2. Population Growth & Demographics
3. Economic / Employment Growth
4. Government Planning / Policy
5. Market Cycle
We apply the framework to 42 key suburbs to help investors and home buyers match strategy to suburb characteristics.
SUBURB METHODOLOGY SELECTION
AFFORDABILITY
Either low prices suiting buyers on a budget or relative affordability compared to nearby suburbs.
AMENITY
Being the level of lifestyle benefits, from bars and restaurants to boutiques and parklands.
FAMILY APPEAL
Such as dwelling type, perceived safety and proximity to good schools.
LOCATION
Including proximity to the CBD or major hubs, or closeness to natural amentities like beaches.
INVESTMENT PROSPECTS
From rental market conditions to expected imminent upside.
GENTRIFICATION
Being the changing face of a suburb
POPULATION GROWTH
Representing a projected increase in the number of locals.
DEMOGRAPHIC CHANGE
Indicating a shift from the current make-up of residents, for example young families replacing downsizing elderly locals.
INFRASTRUCTURE
Looking at major investments in projects that will benefit the suburb or surrounds.
SCHOOLS
Government school zones: Aspendale Primary School, Mordialloc College
KEY DEVELOPMENTS
Station St level crossing removal + new rail bridge and shared path
GENTRIFICATION SIGNALS
• New café/gelato lane on Laura St packed on weekends
• Nepean Hwy traffic noise halves buyer pool on boundary streets.
• Ageing weatherboards often require significant structural work, which means renovation blow outs
SCHOOLS
Government school zones: Hastings Primary School, Western Port Secondary College
KEY DEVELOPMENTS
Port of Hastings flagged for hydrogen export hub; early civil contracts let 2024
GENTRIFICATION SIGNALS
• Port of Hastings hydrogen export hub feasibility drives engineering contractors to town; coffee roaster and distillery open on High St
POTENTIAL DRAWBACK
Project uncertainty after 2025 safety concerns puts timeline at risk
SCHOOLS
Government school zones: Sandringham East Primary School, Moorabbin Primary School, Sandringham College
KEY DEVELOPMENTS
• Suburban Rail Loop East (SRL) –Cheltenham underground terminus & 26 km twin tunnels
GENTRIFICATION SIGNALS
• Former CSIRO site master plan delivers mixed use village, first build to rent tower leased in weeks
• Highett Rd micro distillery and live music nights attract inner north creatives
POTENTIAL DRAWBACK
• Rapid apartment rollout around Highett Rd station; rental competition may soften yields
• Major shopping centre redevelopment could disrupt amenity during multi year build City of Kingston
SCHOOLS
Government school zones: Oakleigh Grammar, South Oakleigh Secondary College
KEY DEVELOPMENTS
Caulfield–Dandenong SkyRail linear park & pocket park program
GENTRIFICATION SIGNALS
• Elevated rail frees land for pocket parks & pop up food vans
• Oakleigh’s Eaton Mall spill over drives demand for boutique apartments west of Poath Rd
POTENTIAL DRAWBACK
• Lack of dedicated secondary zone prestige; buyers may pivot to McKinnon SC streets
• Elevated train line shading/noise affects streets west of Poath Rd.
LANGWARRIN
SCHOOLS
Government school zones: Langwarrin Primary School, Langwarrin Park Primary School, Elisabeth Murdoch College (Langwarrin)
KEY DEVELOPMENTS
• Major retail expansion at Karingal Hub (5 min north) is drawing new national tenants and services
• Proposed duplication of Cranbourne Frankston Rd will shorten CBD bus times
GENTRIFICATION SIGNALS
• The Gateway shopping strip attracting gourmet deli and Pilates studio
• Hospital staff from Peninsula Health choosing larger Langwarrin lots over Frankston apartments
POTENTIAL DRAWBACK
Limited rail access keeps commuters reliant on congested Peninsula Link during peaks
LANGWARRIN SOUTH
SCHOOLS
Government school zones: Woodlands Primary School, Elisabeth Murdoch College
KEY DEVELOPMENTS
Small lot rezoning around Robinsons Rd unlocking boutique acreage subdivisions
GENTRIFICATION SIGNALS
• Lifestyle acreage conversions to architect designed farmhouses featured in design magazines
POTENTIAL DRAWBACK
Planning delays mean construction timelines can slip, tying up capital longer
SCHOOLS
Government school zones: Mentone Park Primary School, Mentone Primary, Mentone Girls’ Secondary, Parkdale Secondary College
KEY DEVELOPMENTS
Parkdale rail trench & new open air station plaza
GENTRIFICATION SIGNALS
• Mentone Parade cafés now trading late; alley art festival backed by council.
• Premium townhouse launches > $1.3 m sell out off plan within weeks (school zone effect)
POTENTIAL DRAWBACK
• Aircraft noise overlay from Moorabbin flight path
• Gender split secondary (Mentone Girls) means co ed families rely on Parkdale SC availability
SCHOOLS
Government school zones: Mordialloc Beach Primary School, Mordialloc College
KEY DEVELOPMENTS
• McDonald St rail bridge + new Mordialloc Station
GENTRIFICATION SIGNALS
• Mordialloc Creek marina expansion spurs nautical chic restaurants
• GABS listed micro brewery opens in renovated canning warehouse
POTENTIAL DRAWBACK
Limited parking near Main St restricts townhouse density potential
• Bay trail upgrades may increase visitor congestion on weekends
SCHOOLS
Government school zones: Mornington Primary School, Osborne Primary School, Mount Martha Secondary College (planned), interim: Mornington Secondary College proposal
KEY DEVELOPMENTS
• Village streetscape beautification (Tower Rd & Mount Eliza Way)
GENTRIFICATION SIGNALS
• Main St footpath dining licenses doubled; rooftop bars overlooking harbour
• Digital nomad co working hub occupancy climbs to 90%
POTENTIAL DRAWBACK
• Septic tank requirements on larger lots raise maintenance costs
• Limited public transport—future generational shift may prefer better connected suburbs
SCHOOLS
Government school zones: Mount Eliza North Primary School, Mount Eliza Primary School
KEY DEVELOPMENTS
Village streetscape beautification (Tower Rd & Mount Eliza Way)
GENTRIFICATION SIGNALS
• Boutique grocers and wellness clinics replacing takeaway shops in Mount Eliza Village. New clifftop multi million builds featured in luxe property magazines.
POTENTIAL DRAWBACK
• Septic tank requirements on larger lots raise maintenance costs
• Limited public transport—future generational shift may prefer better connected suburbs
MOUNT MARTHA
MURRUMBEENA
SCHOOLS
Government school zones: Mount Martha Primary School, Osborne Primary School, Mount Martha Secondary College (planned), Dromana College (current)
$1.1 bn Frankston Hospital redevelopment (130 extra beds, research hub, childcare centre)
SCHOOLS
Government school zones: Skye Primary School, Carrum Downs Secondary College
KEY DEVELOPMENTS
• 2024 Skye/Frankston North PSP earmarks 3,000 extra dwellings plus sporting reserve
GENTRIFICATION SIGNALS
Proposed Bald Hill Rd extension improves access; boutique childcare centres opening signal rising household incomes
POTENTIAL DRAWBACK
Aircraft noise overlay from Moorabbin flight path caps density in western pocket
SOMERVILLE
SCHOOLS
Government school zones: Somerville Primary School, Somerville Secondary College
KEY DEVELOPMENTS
$16 m Somerville Community Hospital upgrade commences late 2025
GENTRIFICATION SIGNALS
• Station St “eat street” revived with craft burger joint and specialty coffee; weekend antique fairs growing foot traffic
POTENTIAL DRAWBACK
Limited public transport—car dependency leaves suburb exposed to fuel price shocks
SCHOOLS
Government school zones: St Kilda Primary School, St Kilda Park Primary School, Elwood College
KEY DEVELOPMENTS
• St Kilda Triangle renewal – live music venue, gardens & boutique hotel
GENTRIFICATION SIGNALS
• St Kilda Triangle renewal project (Esplanade) approved, promising performance venue + boutique hotel
• A list restaurants return (ex Attica chef’s wine bar), raising dining prestige
POTENTIAL DRAWBACK
• High apartment density, meaning an oversupply risk, especially in older walk ups
• Short stay (Airbnb) regulation uncertainty may impact investor returns
ASPENDALE
ASPENDALE GARDENS
MARKET DASHBOARD
ASPENDALE
ASPENDALE GARDENS
HASTINGS
INFRASTRUCTURE DEVELOPMENT
Melbourne’s coastline from Cheltenham to Mount Martha is about to feel the combined force of three game-changing projects that will reshape accessibility, employment and lifestyle over the next decade.
SUBURBAN RAIL LOOP EAST (SRL)
Cheltenham becomes the southern anchor of Victoria’s orbital rail network. Twin tunnel boring machines arrive in 2026 and revenue services are targeted for 2035, giving residents of Brighton, Highett and St Kilda a one seat ride to Monash, Box Hill and—at later stages—Melbourne Airport. Early land releases around the 20 hectare SRL precinct have already lifted development bids by more than 15 % in the past 12 months.
FRANKSTON-LINE MODERNISATION
Every boom gate between Bonbeach and Parkdale is now removed or funded. New trench and bridge stations at Edithvale, Carrum and Cheltenham have replaced traffic bottlenecks with landscaped plazas, historically adding 5 8 % to nearby house prices within five years. The next milestone is the Parkdale rail trench (opening 2027) alongside a business case to drive electrified services south to Baxter.
HEALTH & HARBOUR HUBS
The $1.1 billion Frankston Hospital redevelopment completes in 2026, delivering 130 extra beds, a medical research institute and 2 300 permanent clinical jobs, underpinning rental demand from Frankston South to Mount Eliza. Further down the coast, the Mornington Safe Harbour marina (2026 28) will activate a year round boating, dining and tourism precinct for Mornington and Mount Martha.
BUDGET TAIL-WINDS
The 2025 26 Victorian Budget allocates $421 million to rail reliability: $52 m for extra Bendigo carriages, $270 m for V/ Line maintenance, and—crucially—$99 m to increase services on the Sandringham line as well as Craigieburn, Upfield, Werribee and Gippsland routes. More frequent Sandringham trains directly benefit Hampton, Brighton and Sandringham, while Gippsland inter peak boosts improve connectivity for Mentone through Mordialloc commuters.
Complementing the “big three” is a network of precinct upgrades:
• Beaumaris Secondary College’s new STEM wing, lifting school zone prestige.
• Highett’s CSIRO site transforming into a mixed use science village with build to rent towers.
• St Kilda Triangle’s approved live music venue and boutique hotel (2027 30) rebooting the foreshore economy.
Together these investments compress commute times, expand white collar job nodes and lock in coastal land scarcity—the proven ingredients for sustained capital growth and resilient yields across Bayside Melbourne.
Together these investments compress travel times, lift white collar employment nodes and restrict net new land supply—three ingredients that have historically driven sustained price appreciation and rental growth across bayside Melbourne.
POPULATION
DEMOGRAPHICS
The Bayside arc spans five LGAs — Bayside, Glen Eira, Kingston, Frankston and Mornington Peninsula — covering only 260 km² yet housing some of Victoria’s most affluent, educated and rapidly evolving communities. Combined population stands at 534, 000 in 2025 and is projected to reach 628 000 by 2046—a steady 18 % uplift driven less by raw numbers than by a marked demographic pivot.
OWNERSHIP
POPULATION DEMOGRAPHICS
POPULATION DEMOGRAPHICS
POPULATION DEMOGRAPHICS
OCCUPANCY SNAPSHOT
BACHELOR PERCENTAGE
DEFINITIONS
LABOUR FORCE PERCENTAGE:
The percentage of people working in the labour industry.
BACHELOR PERCENTAGE: The percentage of people with a bachelor’s degree.
OCCUPANCY SNAPSHOT
BACHELOR PERCENTAGE
FRANKSTON SOUTH
HAMPTON
ECONOMIC & EMPLOYMENT GROWTH
The Victorian Government’s Activity Centre Program, aims to build 300,000 new homes within the eventual 60 activity centres, of which only 10 have so far been released these being: Preston (High Street), Broadmeadows, Niddrie (Keilor Road), North Essendon, Moorabbin, RIngwood, Frankston, Epping, Camberwell Junction and Chadstone Activity Centre.
The activity centres aims for housing to be well located by allowing the maximise use of existing infrastructure, services, jobs, green space and public transport. The idea for residents in living in these new zones will make day to day life easier, more convenient, and more sustainable. Following strong community feedback on the first 10 activity centres in 2024, Victorians valued strong transport connections. Planning for the next 25 activity centres is underway and will be released in later in 2025.
ASPENDALE/ASPENDALE GARDENS
PROJECTED NEW JOBS/MAJOR PROJECTS
• New Station St rail bridge & retail plaza, resulting in 150 construction jobs, 120 ongoing retail/health roles
PROJECTED NEW JOBS/MAJOR PROJECTS
• Wetlands Discovery Centre (chain of ponds tourism project) adds 80 eco tourism jobs
KEY GROWTH INDUSTRIES
• Neighbourhood retail, allied health
FLAGSHIP NEW EMPLOYERS/ ASSETS
• Level crossing plaza tenancies; expanded Aspendale Gardens Shopping Village
KEY GROWTH INDUSTRIES
• Environmental education, tourism
FLAGSHIP NEW EMPLOYERS/ ASSETS
• Edithvale Seaford Wetlands Centre
BAXTER
PROJECTED NEW JOBS/MAJOR PROJECTS
• Less 1,000 direct jobs, but there will be
• pivotal benefits if the Frankston–Baxter rail electrification proceeds. (business case complete)
infrastructure.gov.au
KEY GROWTH INDUSTRIES
• Rail construction, health services (Frankston), logistics
FLAGSHIP NEW EMPLOYERS/ ASSETS
• Proposed Baxter station & stabling yard; specialist rail contractors
• Monash Health Moorabbin cancer centre Stage 2 = 900 jobs
KEY GROWTH INDUSTRIES
• Health tech, specialty food, co working
FLAGSHIP NEW EMPLOYERS/ ASSETS
• Monash Cancer Centre expansion; Eaton Mall hospitality spill over
LANGWARRIN
PROJECTED NEW JOBS/MAJOR PROJECTS
• Karingal Hub stage 2 ($100 m) retail re tenanting adds 500 positions
KEY GROWTH INDUSTRIES
• Retail, food services
LANGWARRIN SOUTH
PROJECTED NEW JOBS/MAJOR PROJECTS
• Boutique acreage developments (< 150 lots) will support 250 construction roles.
FLAGSHIP NEW EMPLOYERS/ ASSETS
• Expanded Karingal Hub centre
KEY GROWTH INDUSTRIES
• Viticulture, lifestyle tourism FLAGSHIP NEW EMPLOYERS/ ASSETS
• Micro wineries / farm gate trail
MENTONE/PARKDALE
PROJECTED NEW JOBS/MAJOR PROJECTS
• Parkdale rail trench TOD zone: 300 apartments + 6 000 m² retail resulting in 500 jobs; Mentone Grammar STEM hub 45 jobs
KEY GROWTH INDUSTRIES
• Education, boutique retail
FLAGSHIP NEW EMPLOYERS/ ASSETS
• Parkdale TOD; Mentone Gr & Mentone Girls’ upgrades
MORDIALLOC
PROJECTED NEW JOBS/MAJOR PROJECTS
• Mordialloc Station rebuild & creek front boardwalk: 200 construction, 150 hospitality jobs
KEY GROWTH INDUSTRIES
• Water front dining, leisure marine
FLAGSHIP NEW EMPLOYERS/ ASSETS
• New Mordi Station; Creek side dining precinct
DEVELOPMENTS IN BAYSIDE & SURROUNDS
FIG 4: Monash University Health & Community Hub Clayton Campus Extension
FIG 5: The Victorian Government is delivering a $1.1 billion redevelopment of Frankston Hospital
FIG 6: The Port of Hastings selected by the Victorian Government as the preferred as the preferred location for the establishment of the Victorian Renewable Energy Terminal
FIG 4
FIG 5
FIG 6
DEVELOPMENTS IN BAYSIDE & SURROUNDS
FIG 7: The North East Link saving motorists time when heading to and from Northern Suburbs and Northern Victoria
FIG 12: Tyabb Packing House & Village https://www.visitmorningtonpeninsula. org/Things To Do/Markets Shopping/View/_293c822478dbdc080c81ce85/Tyabb Packing House Village
FIG 10
FIG 11
FIG 12
GOVERNMENT POLICY PLANNING
The Labor government’s housing promises from the recent 2025 federal election, focusing on how they plan to support Australians into housing, assist first-home buyers, address deposit challenges, support renters, enhance affordability, and boost home construction.
SUPPORT FOR FIRST HOME BUYERS
Deposit Scheme (Expanded First Home Guarantee)
Labor has expanded the existing First Home Guarantee scheme, allowing all first home buyers to purchase a home with just a 5% deposit without paying Lenders Mortgage Insurance (LMI). Previously, this scheme had income and participant caps, but the expansion removes these limitations, making it accessible to a broader range of buyers. For example, a Sydneysider could buy a $1 million property with a $50,000 deposit, saving up to $20,000 in LMI costs.
Help to Buy Shared Equity Scheme
This initiative enables eligible buyers to co purchase a home with the government, which can contribute up to 40% of the purchase price for new homes (30% for existing homes). This reduces the amount buyers need to borrow, lowering monthly repayments and making homeownership more attainable. Help to Buy is expected to open for applications later this year (following registration of the program directions, passage of state legislation, and implementation by Housing Australia). Purchase price cap increasing to 950k (up from $800k) for Metro Melbourne and 650k for regional (unchanged).
Construction of 100,000 Homes for FirstHome Buyers
Labor has committed $10 billion to build up to 100,000 homes exclusively for first home buyers. These homes will be constructed in partnership with states, developers, and community housing providers, with construction commencing in 2026 27 and occupancy beginning the following financial year.
Housing Australia Future Fund (HAFF)
The HAFF is a $10 billion investment fund aimed at building 30,000 new social and affordable homes over five years. The fund’s returns are used to finance the construction of these homes, addressing the housing supply shortage and improving affordability.
SUPPORT FOR RENTERS
Commonwealth Rent Assistance (CRA) Labor plans to increase the CRA payments to provide additional support to low income renters, helping to alleviate rental stress and improve housing affordability.
Build-to-Rent Incentives
To boost the supply of rental properties, Labor has introduced tax incentives for developers to construct build to rent housing. This initiative aims to deliver approximately 80,000 additional rental units over a decade, increasing rental availability and stabilising prices.
ADDITIONAL MEASURES
Ban on Foreign Purchases of Existing Homes
To prioritise Australian buyers and reduce competition in the housing market, Labor has implemented a two year ban on foreign investors purchasing existing residential properties.
BROADER HOUSING SUPPLY INITIATIVES
National Housing Accord
Labor has set a target to build 1.2 million new homes by mid 2029 through the National Housing Accord. This ambitious plan involves collaboration with state governments and the private sector to accelerate housing construction and address the national housing shortage. One key reason new home construction hasn’t progressed as quickly as the government anticipated is that taxes make up 42% of the total cost of building a new home.
MARKET CYCLE
Melbourne is entering a rare window of value, providing the most compelling risk-adjusted entry point. CoreLogic shows the city’s median price for combined dwellings of units and houses sitting at 35% below Sydney, 15% below Brisbane, 4% below Adelaide and 3% below Perth. Melbourne currently has a liquid market that lets investors scale, rental vacancy has tightened to 1.4 %, with investor rental yields on average offering 4.9% for units and 3.2% for houses.
Crucially, Victoria’s $100 billion Big Build pipeline dwarfs infrastructure spend in any other state outside of Queensland, promising sustained jobs led demand. With international migration forecast to concentrate in Melbourne through 2030, capital growth upside exceeds that of already peaking Sydney and resource cyclical Perth.
Savvy buyers can ride the upswing as major projects complete and constrained supply meets accelerating household formation.
Nationally across the 6 major capital cities, Brisbane, Perth and Adelaide have had a 5-year boom in real estate from 2020 to today, the chart at right shows you the generational opportunity that exists in Melbourne with only a 2.8% increase.
MAY 2020 T0 MAY 2025 (POST COVID)
HOBART
*Note: figures are approximate, based on available data. SYDNEY MELBOURNE BRISBANE ADELAIDE PERTH
MAY 2015 TO MAY 2020 (PRE COVID)
Winding the clock back 5 years prior to Covid the numbers show a different growth pattern particularly for Melbourne, where it has enjoyed the title of the 3rd best performing capital city with 26.2% growth, a stark contrast to the 2.8%, 5 years later. Hobart experienced the highest growth over the five year period, with a significant increase of 55.1% in median dwelling prices.
*Note: May 2015 figures are approximate, based on available data.
MAY 2015 TO MAY 2025
The table below paints the stories of growth over the last 10 years. Adelaide and Hobart was highest growth over the past decade, with increases of 104.9% and 101.2%, respectively. This growth is attributed to factors such as affordability, lifestyle appeal, and increased interstate migration. Brisbane has also seen significant growth of 81.3%, driven by strong population growth and infrastructure development. Perth’s growth of 58.7% reflects a recovery from earlier market downturns, supported by the mining sector and increased demand. Sydney and Melbourne have experienced more moderate growth of 48.6% and 29.7%, respectively, due to higher base prices and affordability constraints.
SYDNEY MELBOURNE
BRISBANE ADELAIDE
PERTH
$810,000 CITY 10 YEAR GROWTH DATA MAY 2015 MAY 2025 10 YR GROWTH $610,000 $506,553 $405,000 $513,000 $335,000
HOBART
*Note: May 2015 figures are approximate, based on available data.
MAY 2023 TO MAY 2025
Judging by the table below, the 2 year trend across the 6 capital cities paints a renewal of growth for all states a part from Melbourne. Brisbane, Adelaide and Perth have experienced the highest growth over the past two years, each with approximately 10% increases in median dwelling values.
Sydney has seen moderate growth of 4.6%, while Hobart’s growth has been more subdued at 2.1%. Melbourne is the only capital city to record a decline in median dwelling values over the two year period, with a decrease of 2.3%.
IN SUMMARY
Melbourne’s comparatively modest property growth over the past decade and particularly the last 5 and 2 years can be attributed to a range of factors—many of which extend beyond government policy. At the heart of it is what can best be described as a COVID 19 hangover—a unique circumstance that no other capital city faced to the same extent. While government initiatives like the 10 year COVID Land Tax levy and the introduction of stricter regulations for landlords (rental providers) have certainly played a role, they are only part of the story.
Victoria also faces significant state debt, yet it is actively investing in its future through transformative infrastructure programs such as the Big Build. When it comes to tenancy reforms, Victoria has led the nation, and while some may criticise the extent of these changes, other states are expected to follow suit—if not fully, then in part.
Another contributing factor to Melbourne’s slower growth may lie in the lack of new support mechanisms for first home buyers. The stamp duty concession, unchanged since 2017, still offers a full exemption up to $600,000 and a partial concession up to $750,000—providing no adjustment for inflation or market movement in recent years.
Taxation on investment properties also remains a point of contention. The recently passed Fire Services Levy—as of May 2025—now places a heavier financial burden on landlords compared to owner occupiers, with the government anticipating an additional $2 billion in revenue.
But within this uncertainty lies opportunity. As Warren Buffett famously said, “Be fearful when others are greedy, and greedy when others are fearful.” For astute investors, Melbourne’s market conditions may represent precisely that kind of moment.
To summarise the Melbourne investors reactions to Government policy it has been a one two mindsets the first is “it’s all too hard” and the second “we’re not playing anymore” A recent study over two decades puts this into mindset into perspective, that approximately one in five investment properties are sold within the first year of ownership, while 28 per cent are held for more than 20 years. The motto should always be “buy well and never sell”.
SOURCES & DISCLAIMER
Data sources: realestate.com.au
Forecast.id
SQM Research
Victorian Government Big Build project announcements.
Census 2021 Victorian Planning Authority
Chat GPT
Visit Melbourne
The information contained in the Axis Guide is for general informational purposes only and does not constitute financial, investment, or legal advice.
While every effort has been made to ensure the accuracy and reliability of the information provided. Readers are encouraged to seek independent professional advice before making any property or financial decisions.
OBrien Real Estate disclaims all liability for any loss or damage arising from reliance on the information contained in this guide.
WORDS & DATA BY JASON MUDFORD
DESIGN & CREATIVE BY OLIVIA WARDEN
WHERE DATA MEETS DIRECTION
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