Melbourne has long been Australia’s cultural heart, but in the last few years, it also became one of the most interesting markets for investors. While Sydney grabbed headlines with sky-high property prices and Brisbane surged on interstate migration, Melbourne quietly built the perfect storm for smart buyers: relative affordability, tight rental markets, and billions in new transport projects.
With the Metro Tunnel opening in 2025 and the Suburban Rail Loop (SRL East) underway, entire pockets of the city are about to become more connected—and more attractive to both renters and investors. Add to that some of the strongest population growth forecasts in the country, and Melbourne is suddenly back in the spotlight.
So where should you buy if you’re looking to invest this year? Let’s break it down in this guide by Supercheap Interstate Removals.
Quick Investor Snapshot
Why Melbourne now?
Melbourne is still more affordable than Sydney and Brisbane, yet rental demand is soaring. Vacancy rates are at record lows, and new rail projects like the Metro Tunnel are set to make city travel faster and easier.
(Source: The Australian)
What to target?
Look for suburbs with tight vacancies, a diverse tenant pool (students, health workers, professionals), and areas touched by major infrastructure like the SRL East.
Yield reality check:
Gross yields in Melbourne average around 3.7%, with units usually outperforming houses. The sweet spot? Suburbs like Footscray and Box Hill, where yields regularly outpace the city average
How We Chose the Suburbs
When picking the best suburbs to invest in Melbourne, four things matter most:
Rental demand & vacancy – Will your property sit empty, or lease quickly?
- Yield vs price – Is the rent worth the upfront cost?
- Infrastructure upgrades – Will new transport, hospitals, or universities drive demand?
- Tenant diversity – Suburbs that attract only one type of renter are riskier than those with a mix.
The 10 Best Suburbs to Invest in Melbourne in 2025
1. Footscray (3011) – Inner-West Growth Star
( Image source: realestate.com.au )
Footscray is often described as the “Brunswick of the west,” and with good reason. Just a few kilometres from the CBD, it has morphed from a working-class hub into a cultural melting pot with cafés, breweries, multicultural dining, and a thriving arts scene.
Why investors love it:
- Unit yields regularly reach 5–6%, making it one of the strongest performers in inner Melbourne.
- The suburb benefits from Victoria University, a major hospital precinct, and proximity to the Maribyrnong River redevelopment.
- The planned Footscray Hospital rebuild (due 2025) will attract healthcare professionals, boosting rental demand.
Risks to consider: Some high-rise apartments have oversupply risks; stick to low- or mid-rise blocks with strong owner-occupier appeal.
Look for larger two-bedroom apartments or townhouses within walking distance of the station. These tend to lease quickly and command above-average rents.
2. Sunshine (3020) – Affordable and Connected
( Source: https://www.pitchvisuals.com.au )
Long overshadowed by inner-west neighbours, Sunshine is now earning attention as a transport and employment hub. Its multicultural vibe, large retail centre, and strong community facilities make it highly liveable.
Why investors love it:
- Sunshine is tipped to become a key junction if the Airport Rail Link goes ahead. Even without it, it has direct V/Line and Metro services.
- Units in Sunshine are relatively affordable, yet rental yields sit around 4.7–5.1%.
- Population growth in Melbourne’s west continues to surge, meaning Sunshine is no longer “up-and-coming”—it’s already here.
Risks to consider: Delays in major infrastructure projects could slow capital growth.
Properties close to Sunshine Station or Sunshine Marketplace are most attractive to renters, especially professionals commuting to the CBD.
3. Box Hill (3128) – The Mini CBD of the East
( Source: Thumbs.dreamstime )
Box Hill has transformed into Melbourne’s second CBD, with a skyline to match. High-rise apartments, shopping complexes, and a buzzing food scene make it a destination in itself.
Why investors love it:
- The Suburban Rail Loop East (SRL East) will add a direct link to Monash and Glen Waverley, turbocharging connectivity.
- Rental demand is consistent thanks to Box Hill Hospital, TAFE, and Deakin University nearby.
- Yields hover around 5–6%, especially for two-bedroom apartments.
Risks to consider: The area already has a high concentration of apartments, so quality and location matter more than ever.
Choose boutique apartments or townhouses instead of cookie-cutter high-rises. Tenants (and future buyers) are more selective now.
4. Clayton (3168) – Monash University’s Powerhouse
(Source: Optimove )
Clayton is a rental magnet, driven by Monash University (Australia’s largest) and the Monash Medical Centre. It’s a suburb where rental demand rarely dips, regardless of market cycles.
Why investors love it:
- Students, academics, and healthcare professionals create a deep, stable rental pool.
- The SRL East station at Clayton is confirmed, which will further strengthen its transport credentials.
- Average unit yields of ~4.8% make it attractive compared to Melbourne’s citywide average.
Risks to consider: A heavy student focus means some stock is investor-dominated, so buy with future owner-occupiers in mind.
Modern, light-filled apartments within walking distance of campus or the hospital command premium rents.
5. Preston (3072) – Inner-North All-Rounder
(Source: Stock.adobe)
Once seen as the “cheaper cousin” to Thornbury, Preston has carved its own identity. With its High Street dining strip, Preston Market, and multiple tram and train options, it’s an attractive inner-north address.
Why investors love it:
- Rental yields typically sit at 4.3–4.6%, with strong leasing demand.
- The suburb appeals to young professionals and families priced out of Fitzroy or Brunswick.
- Ongoing gentrification means both rents and values are on an upward trajectory.
Risks to consider: Some newer developments may lack character or be poorly constructed—do due diligence.
Older-style apartments near Bell or Preston Station are more spacious and often outperform cookie-cutter new builds.
6. Frankston (3199) – The Bayside Revival
(Source: Dreamstime)
Frankston has shaken off its rough reputation and emerged as an affordable seaside hub with strong infrastructure. The beach, retail centres, TAFE, and Frankston Hospital create steady tenant demand.
Why investors love it:
- Affordable entry compared to other beachside suburbs.
- Yields of 4.7% for units provide strong cash flow.
- The Frankston Station redevelopment and proximity to the Mornington Peninsula add lifestyle appeal.
Risks to consider: Certain streets still carry stigma—choose well-maintained areas.
Look for apartments or townhouses within walking distance of the beach, station, and shopping centre. Tenants pay more for convenience.
7. Werribee (3030) – Family-Friendly and Affordable
( Source: Shutterstock )
Werribee has grown from a dormitory suburb into a self-sustained hub with schools, shopping centres, a hospital, and tourist attractions like Werribee Zoo.
Why investors love it:
- Affordable houses with space—appealing to families.
- Rental yields between 3.8–4.7%.
- Strong long-term growth potential as Melbourne sprawls westward.
Risks to consider: Commutes to the CBD can be long, so focus on properties near transport.
Three- and four-bedroom houses close to schools are almost always in demand from family renters.
8. Sunshine North & Sunshine West – Affordable Extensions of the Hub
Neighbouring Sunshine, these areas offer cheaper entry points while still benefiting from transport and infrastructure. Urban renewal is slowly reshaping their character.
Why investors love it:
- Units deliver 4.4–5% yields.
- Lower buy-in than Sunshine proper but similar tenant demand.
- Young families and migrants continue to drive population growth here.
Risks to consider: Some industrial land remains, so research zoning and overlays.
Quiet residential pockets near schools and transport are your safest bets.
9. Glen Waverley (3150) – Premium Eastern Suburb
(Source: Zenu.com.au )
Glen Waverley is a perennial favourite thanks to its top schools, bustling shopping precinct (The Glen), and reliable transport. With the SRL East adding a future station, its long-term credentials are rock-solid.
Why investors love it:
- Consistent demand from families seeking school zones.
- Rental yields around 4% for units—modest, but vacancy is low.
- Proximity to Monash and Box Hill strengthens its position.
Risks to consider: High entry costs compared to other suburbs; not ideal for yield-chasers.
Townhouses or family-sized apartments in the Glen Waverley Secondary College zone are gold.
10. Melbourne CBD & Surrounds – The Rental Workhorse
( Source: fareast.net.au)
Despite ups and downs, Melbourne’s CBD remains the engine room for rental demand, thanks to international students, professionals, and lifestyle renters.
Why investors love it:
- Some apartments deliver above-average yields, especially larger ones.
- The Metro Tunnel will ease congestion and cut cross-city travel times.
- International migration is rebounding, bolstering rental demand.
Risks to consider: Owners corporation (strata) fees can eat into yields; oversupply risk in some towers.
Avoid micro-apartments and stick to larger, well-lit floorplans in reputable buildings.
Quick Recap
| Suburb | Why It Stands Out | Typical Gross Yield | Best Buy Type | Pro Tip |
| Footscray (3011) | Inner-west hub with uni, hospitals, and new hospital rebuild | 5–6% (units) | 2-bed units, townhouses | Focus on low-rise apartments near station/river |
| Sunshine (3020) | Affordable transport hub; strong westward population growth | 4.7–5.1% (units) | Units near town centre/station | Buy near Sunshine Station for fastest leasing |
| Box Hill (3128) | SRL East stop, health & education precinct | ~6% (2-bed units) | Boutique apartments, townhouses | Avoid micro-units; go for larger layouts |
| Clayton (3168) | Monash Uni + Medical Centre + SRL East | ~4.8% (units) | Modern apartments near uni/hospital | Tenant pool stable year-round |
| Preston (3072) | Inner-north lifestyle, High St dining, strong gentrification | 4.3–4.6% (units) | Older-style spacious units, townhouses | Stick near Bell/Preston stations |
| Frankston (3199) | Bayside affordability + hospital, TAFE, and lifestyle revival | ~4.7% (units) | Beachside apartments/townhouses | Walk-to-beach + station fetch higher rents |
| Werribee (3030) | Family-friendly, affordable houses, strong rental pool | 3.8–4.7% (houses/units) | 3–4 bedroom family houses | Houses near schools are long-term winners |
| Sunshine N/W | Affordable extensions of Sunshine, urban renewal | 4.4–5% (units) | Units/townhouses in quiet residential areas | Check overlays & zoning before buying |
| Glen Waverley (3150) | Premium schools + The Glen + SRL East connectivity | ~4% (units, townhouses) | Family-sized apartments, townhouses | Focus on Glen Waverley Secondary College zone |
| Melbourne CBD | High rental demand, Metro Tunnel impact, intl. students | 4–5% (larger units) | 2-bed apartments with natural light | Avoid micro-apartments; check strata fees |
Conclusion
Melbourne’s “quiet” years may have fooled some investors, but 2025 looks like the turning point. Between strong rental demand, relative affordability, and billions in infrastructure spend, the city offers both yield opportunities and growth potential.
If you focus on suburbs with tenant demand, connectivity, and livability, you’ll be positioned not just for steady rent but also for long-term capital growth. From Footscray’s high yields to Box Hill’s rail-driven future, Melbourne is back on the radar—and this time, the numbers stack up.
FAQs
Is it better to buy a unit or a house?
Units often deliver stronger yields, especially in Footscray, Box Hill, and Preston. Houses work well in outer suburbs like Werribee if you want land and families as tenants.
Will rents stay high?
With supply lagging behind demand and vacancies at record lows, rents are likely to stay elevated for the foreseeable future.
Which suburbs are safest for long-term growth?
Areas near major infrastructure—Box Hill, Clayton, and Glen Waverley—tend to hold their value and attract diverse tenant bases.