Entering Melbourne’s property market for the first time can feel overwhelming, especially in 2025’s evolving landscape. With shifting interest rates, government incentives, and varying suburb performances, today’s first home buyers face a complex but opportunity-rich environment.
Looking for personalised guidance on entering Melbourne’s property market? Contact our team for expert first home buyer advice.
Melbourne’s Current Property Market Overview
The Melbourne property market in 2025 continues to present opportunities for first home buyers, despite the challenges. The median house price now sits at $850,000, while units average around $580,000—representing a more accessible entry point for many first-time buyers.
Key market trends affecting first home buyers include:
- Stabilising interest rates following previous fluctuations
- Continued growth in outer suburbs and regional commuter areas
- Strong apartment market performance in select inner and middle-ring suburbs
- Increased competition in first home buyer price brackets
These market conditions create both challenges and opportunities for those looking to step onto the property ladder in Melbourne.
Suburb Guide: Where First Home Buyers Are Finding Success
Northern Corridors
Suburbs like Preston, Reservoir, and Thomastown continue to offer relative value with median house prices between $750,000-$850,000. These areas benefit from:
- Strong transport connections to the CBD
- Developing retail and dining precincts
- Ongoing infrastructure improvements
- Diverse housing stock suitable for first-time buyers
Reservoir in particular has seen significant first home buyer activity, with a growing community of young professionals and families establishing themselves in the area.
Western Growth Areas
Melbourne’s west remains a strong option for first home buyers, with suburbs such as Footscray, Sunshine, and St Albans offering:
- Relatively affordable entry points compared to eastern suburbs
- Rapid gentrification creating future growth potential
- Improved transport connections
- Diverse cultural communities and amenities
Footscray, with its vibrant multicultural atmosphere and proximity to the city, continues to attract first home buyers looking for value with urban lifestyle benefits.
Southeastern Possibilities
For buyers with tighter budgets, the southeastern corridor including Dandenong, Noble Park, and Cranbourne areas provide:
- House and land packages under $650,000
- Established properties with renovation potential
- Strong rental yields for those considering investment first
- Growing commercial and employment hubs
Need help identifying the right Melbourne suburb for your first home? Speak with our local experts for tailored advice.
Victorian First Home Buyer Support Programs
Victorian Homebuyer Fund
This shared equity scheme continues to be valuable for first home buyers in 2025:
- The government contributes up to 25% of the property price
- Reduces the deposit requirement to as little as 5%
- No lenders mortgage insurance needed
- Available for properties up to $950,000 in Melbourne
First Home Owner Grant
The Victorian First Home Owner Grant provides:
- $10,000 for new homes in metropolitan Melbourne
- $20,000 for new homes in regional Victoria
- Eligibility for properties valued up to $750,000
- Tax savings through stamp duty concessions
Stamp Duty Concessions
First home buyers purchasing properties under $600,000 continue to enjoy full stamp duty exemptions, while concessions apply for properties between $600,000 and $750,000.
Navigating Melbourne’s Unique Property Market
Auction Strategies
Melbourne’s auction-heavy market requires specific strategies:
- Attend multiple auctions before bidding to understand the process
- Secure pre-approval to know your exact budget
- Research the gap between listed prices and actual sales results
- Consider engaging a buyer’s advocate for high-competition properties
Melbourne Property Inspections
When inspecting Melbourne properties, pay special attention to:
- Signs of poor drainage (particularly in older suburbs)
- Building integrity issues specific to period homes
- Orientation and natural light (especially important in Melbourne’s climate)
- Proximity to public transport (crucial in Melbourne’s sprawling layout)
Ready to start your home buying journey in Melbourne? Our team can help with property assessments and financing options.
Financing Your Melbourne First Home
Current Lending Landscape
The lending environment for Melbourne first home buyers in 2025 features:
- Stabilised interest rates following previous volatility
- Various lenders competing for first home buyer business
- Specific loan products designed for government schemes
- Flexible deposit requirements when using support programs
Pre-Approval Importance
Securing pre-approval is particularly crucial in Melbourne’s fast-moving market:
- Provides certainty when attending auctions
- Strengthens negotiating position for private sales
- Typically valid for 3-6 months
- Allows for confident property searching within budget
Lenders Mortgage Insurance Considerations
For Melbourne properties where deposits are less than 20%:
- LMI can add $10,000-$30,000 to your costs depending on loan size
- Some lenders offer LMI capitalisation (adding it to the loan)
- Government schemes can help avoid or reduce LMI costs
- Professional occupations may qualify for LMI waivers with select lenders
First Home Buyer Success Stories
Inner North Apartment Success
“We purchased our first home in Brunswick after realising houses were out of our price range. By focusing on a well-built apartment with outdoor space and good amenities, we got into a vibrant area we love while staying within our budget.”
- Sarah and Michael, first home buyers, 2024
Outer Western Family Home
“We initially looked in the inner suburbs but quickly realised we could get a three-bedroom house in Tarneit for the same price as a one-bedroom apartment closer to the city. The extra space has been perfect for our growing family, and the new infrastructure makes commuting manageable.”
- Arun and Priya, first home buyers, 2024
Expert Tips for Melbourne First Home Buyers
- Focus on long-term potential rather than perfect move-in condition
- Consider transport options carefully – Melbourne’s sprawl means this significantly impacts lifestyle
- Look for properties with renovation potential to build equity
- Research school zones if family planning is in your future
- Don’t overlook body corporate fees when considering apartments or townhouses
Planning Your Next Steps
Entering Melbourne’s property market requires careful planning and strategy. Start by:
- Assessing your true budget and borrowing capacity
- Researching suburbs that align with your lifestyle and budget
- Understanding available government support programs
- Securing pre-approval to strengthen your position
- Building a reliable team of professionals (mortgage broker, conveyancer, building inspector)
Ready to take the first step toward homeownership in Melbourne? Contact our Melbourne team for expert guidance throughout your journey.
The path to homeownership in Melbourne may seem challenging, but with the right strategy, support, and knowledge, your first home purchase can be both achievable and rewarding. Our team specialises in helping first home buyers navigate Melbourne’s unique market conditions and find the perfect property to call home.
