In 2025, Melbourne’s market is being reshaped by local owner-occupiers, not just investors. The strongest-performing locations are those with real affordability drivers, restricted supply and growing demand from locals.
At futurx, we base our strategies on in-depth data research, not short-term trends. Here’s what the numbers are showing across Melbourne.
1. Data Points to LGAs with Diversified Demand and Livability Drivers
Our research identifies several LGAs where capital growth is being driven by owner-occupier demand, lifestyle appeal, and tight supply
Hume (Roxburgh Park, Meadow Heights, Westmeadows, Campbellfield)
The northern corridor of Hume is experiencing steady price movement. Incomes are rising, and affordability remains attractive for upgraders and first-home buyers. These suburbs are showing above-average demand from homeowners, not just renters.
Darebin (Reservoir, Preston, Thornbury)
Darebin continues to benefit from gentrification, school catchments, and proximity to the CBD. Data shows that the majority of recent transactions have been by owner-occupiers, especially in suburbs like Reservoir, where demand for renovated family homes is putting upward pressure on prices.
Frankston (Frankston, Carrum Downs, Seaford)
Frankston’s growth is no longer speculative. Our analysishighlights improved infrastructure, hospital precinct development, and newcommercial projects. Combined with coastal proximity and relativeaffordability, the area is becoming a lifestyle destination for families — atrend that’s backed by rising owner-occupier interest.
Casey (Narre Warren, Narren Warren South Berwick,)
2. Caution: Oversupply Risks in High-Approval Suburbs
On the other end, our research flags several areas with highbuilding approvals and slow rental or sales absorption.
These include parts of:
• Donnybrook
• Clyde North
• Truganina
While these areas look affordable on the surface, time-on-market data, vacancy rates, and building pipelines suggest over supply pressure is impacting both capital growth and rental performance. Investors should be wary of these signals — especially if planning to hold for only the short to medium term.
3. The Data Favors Dwellings with Land, Not Density
Properties with a land component — whether older homes, townhouses, or small-lot houses — are consistently outperforming high-density stock.
Our analysis shows:
• Low-density zoning is associated withstronger long-term capital growth
• Owner-occupiers are prioritisingspace, livability, and renovation potential
• Infill suburbs within 15–25 km of the CBD are performing better than fringe developments
In LGAs like Darebin and parts of Casey, this pattern is clear: buyers are paying premiums for landed dwellings, even older ones, over new apartments or house-and-land packages.
4. Strategy Over Yield Chasing
Melbourne is not a high-yield market, but well-located assets continue to produce balanced outcomes when factoring in depreciation and long-term growth.
Our preferred model:
• Buy in demand-led growth markets
• Prioritise net cash flow through structure, not just yield
• Support Melbourne assets with complementary cash-flow plays in other states
The aim is not short-term income — it’s long-term portfolio scale.
5. The Window Is Now: Rates Stabilising, Sentiment Resetting
The current cycle is offering a window of opportunity:
• Rates have likely peaked
• Build pipelines are thin
• Sentiment is improving, but still cautious
This creates value arbitrage in quality suburbs wherehomeowners are already active, but competition hasn’t yet surged.
Final Insight: Let the Data Lead Your Decisions
We don’t invest based on feel. We follow:
• Owner-occupier activity
• Supply-side risk metrics
• Infrastructure-led growth signals
Melbourne offers real opportunities right now — but only inlocations with the right mix of demand, scarcity, and sustainability.
Want your next investment guided by real market research?
Book a call with futurx. Let’s build a portfolio strategydesigned to perform, not just look good on paper.
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