--- title: "\"Melbourne Property Isn't Growing\" — Until You Look at the Granular Data" description: "Everyone says Melbourne property isn't growing. The suburb-level data from CoreLogic tells a completely different story — affordable areas are up 10% while premium suburbs are still falling." author: Yan Zhu date: 2025-10-20 category: Guides url: https://premiumrea.com.au/blog/melbourne-property-not-growing-granular-data-truth tags: ["Melbourne property", "suburb analysis", "property data", "CoreLogic", "affordability", "market growth", "investment strategy"] --- # "Melbourne Property Isn't Growing" — Until You Look at the Granular Data *By Yan Zhu, Co-Founder & Chief Data Officer at PremiumRea — 2025-10-20* > People keep telling me Melbourne property is flat. I pull up the CoreLogic heat map and point at the sea of dark blue across the southeast. Then I ask them to explain why Frankston is up 10% while Toorak is still bleeding. I spend roughly three hours a week fielding the same question from investors who follow me on social media. "Yan, is Melbourne really not growing?" And every time, my answer starts with another question: what do you mean by Melbourne? Because "Melbourne" is not one market. It is 321 suburbs, each with its own demand profile, supply pipeline, demographic mix, and price trajectory. Saying "Melbourne isn't growing" is about as useful as saying "Australians are tall." Some are. Some aren't. The average tells you almost nothing about any individual. Today is the last day of 2024, and I want to do something I've been meaning to do all year. I'm going to crack open the actual suburb-level data from CoreLogic — the most granular property dataset in the country — and show you exactly which parts of Melbourne grew, which parts fell, and why the distinction matters more than any headline you'll read on Domain or realestate.com.au. If you're making a six-figure investment decision based on "Melbourne is flat," you need to see these numbers. Because the gap between the best-performing and worst-performing Melbourne suburbs in 2024 is somewhere around 25 percentage points. That's not a rounding error. That's someone's entire retirement. ## The heat map that breaks the narrative CoreLogic publishes a heat map every quarter showing 12-month price movements across metropolitan Melbourne [1]. The colour coding is simple — dark blue for strong growth, light blue for moderate growth, white for flat, and red for declining values. Pull up the Q4 2024 edition and the pattern jumps out of the screen. Melbourne's affordable, outer-suburban corridors — the areas where median house prices sit between $600,000 and $850,000 — are almost entirely dark blue. The far southeast (Cranbourne, Hampton Park, Narre Warren), the outer north (Hume corridor), the Frankston strip, and pockets of the western suburbs are all showing 8-12% annual growth [1]. Now look at the inner city. The areas within 10km of the CBD — the so-called "blue-chip" suburbs where median prices exceed $1.5 million — are a mess of white and red. Toorak, South Yarra, Carlton, parts of Richmond. Flat or still declining. So when someone says "Melbourne isn't growing," what they actually mean is: the expensive parts of Melbourne that get all the media coverage aren't growing. The parts where ordinary Australians actually buy houses? They're running hot. I flagged this exact divergence back in January when I told followers to focus on Frankston, the far southeast, and Geelong. Go watch that video if you don't believe me — it's timestamped, can't fake it. Every single area I highlighted has outperformed since then. ## Why affordable suburbs are pulling away from premium ones This isn't random. There's a structural reason why $700,000 houses in Cranbourne are appreciating faster than $2.5 million houses in Canterbury, and it comes down to one word: affordability. The average Australian household income is roughly $120,000-$130,000 per year [2]. The internationally accepted "comfortable" price-to-income ratio for housing is 7 to 8 times annual income. That puts the sweet spot for housing demand right around $840,000 to $1,040,000. When you overlay that affordability band onto Melbourne's suburb map, it lights up precisely the corridors that are growing — the southeast, the north around Epping and Craigieburn, and the west around St Albans and Deer Park. These areas are where the median household can actually service a mortgage without eating two-minute noodles for dinner. Meanwhile, a $2 million house in an inner-east suburb requires a household income of roughly $250,000 to be "affordable" by the same ratio. That's the top 5% of earners. The buyer pool is tiny. And that tiny buyer pool has been hammered by interest rate increases far more than median-income households, because their mortgages are proportionally larger relative to income when you account for the progressive tax system [3]. Our team at PremiumRea identified this dynamic early. We've purchased close to 100 houses in Melbourne's far southeast over the past year alone, specifically targeting that affordability sweet spot. Many of those properties have already seen valuations climb $30,000-$50,000 within months of settlement [4]. That's not luck — it's reading the data properly. ## The house-unit gap tells you where the pressure is building Domain's quarterly report dropped another fascinating number that most commentators ignored. Melbourne's median house price is now roughly 80% more expensive than its median unit price [5]. And that gap has been narrowing. What does that mean? It means buyers are being priced out of houses and flowing into units. Which means house demand at the affordable end — where the price gap between houses and units is smallest — is getting compressed. Think about it from a buyer's perspective. If you're a young couple earning $140,000 combined, and you can either buy a $680,000 house on 600 square metres in Hampton Park, or a $520,000 two-bedroom apartment in Box Hill with $6,000 in annual body corporate fees... the house wins every time. You get a Torrens title, a backyard, land that appreciates, and no strata levies eating your cash flow. > "People keep telling me they can't afford Melbourne," says Yan Zhu. "I show them a three-bedroom house on 600 square metres in Cranbourne for $650,000 with a 5% rental yield, and they look at me like I've invented a new colour. They assumed 'affordable' meant 'bad.' It doesn't. It means underpriced relative to fundamentals." The data backs this up. CoreLogic's analysis for 2024 shows that properties more than 20 kilometres from the CBD had a 38% chance of positive annual growth, while properties within 5 kilometres had only a 4% chance [1]. That's not a margin. That's a different universe. ## Interstate migration is back — and it's targeting these exact suburbs Victoria's interstate migration numbers turned positive in 2024 for the first time in several years [6]. After a prolonged outflow during COVID and the post-lockdown hangover, people are moving back to Melbourne. And they're not moving to Fitzroy. The returning migrants are predominantly middle-income households who left Victoria when housing got too expensive. They went to Brisbane, Adelaide, regional Queensland. But guess what happened? Those markets also got expensive. Brisbane's median house price jumped 50%+ during the COVID boom. Adelaide followed. Regional Queensland pricing caught up to outer-Melbourne levels. So they're coming back. And they're settling in the exact affordable corridors I keep banging on about — Casey, Cardinia, Frankston, Hume. The councils where $700,000-$800,000 still buys a decent family house with infrastructure: the second-largest shopping centre in Australia (Fountain Gate), good hospitals, train lines, school catchments that don't require a seven-figure mortgage. This interstate flow is a leading indicator. It's new demand that didn't exist 18 months ago, funnelling into suburbs that were already supply-constrained. The Financial Review reported that Victoria lost 20,000 rental properties over the preceding 18 months [7]. Fewer rentals plus more people equals higher rents. Higher rents plus stable purchase prices equals higher yields. Higher yields attract investors. Investors push prices up. The flywheel spins. If you're sitting on the sidelines waiting for "Melbourne to bottom out" before you invest, you may have already missed the bottom in the suburbs that matter. ## The granularity argument — why averages lie I want to make a broader point here, because this isn't just about Melbourne. This is about how you evaluate any property market. Everyone on social media talks in city-level averages. "Sydney is up 8%." "Perth is booming." "Melbourne is flat." These statements are useless for investment decisions. They're cocktail party conversation, not analysis. Consider two neighbouring houses on the same street in Cranbourne. Same land size, same number of bedrooms, similar build quality. One might appreciate 40% over seven years. The other might barely move. Why? Because one sits on a corner block with subdivision potential, and the other is mid-row with a shared driveway. Or one has a granny flat generating $380 per week in additional rent, and the other has a neglected backyard. We evaluate properties at the individual asset level using a framework that scores each suburb across five dimensions: affordability ratio (price-to-income), population growth trajectory, rental vacancy rates, new housing supply pipeline, and development upside [4]. A suburb that scores well on four out of five is worth deeper investigation. A suburb that scores poorly on any two is an automatic pass. Cranbourne scores 8 out of 10 on our framework. Good affordability. No excessive land supply. Mixed-use commercial zoning potential. Over 50% owner-occupier with strong Anglo-Australian demographic base [4]. Rowville, by contrast, scores only 6 — good suburb, but the price-to-income ratio is already at 8x, and the future population growth projections are weak relative to incoming housing supply. > "Anyone still making investment decisions based on city-level data is bringing a butter knife to a gunfight," says Yan Zhu. "The edge is in the granularity. Always has been." The people who tell you Melbourne isn't growing don't have the analytical toolkit to look at individual suburbs, individual streets, individual properties. So they default to the average. And the average, in a market with 321 suburbs spanning a 25-percentage-point range of performance outcomes, is worse than useless. It's actively misleading. ## What this means for 2025 and beyond If the current structural trend holds — and I see no reason why it won't — Melbourne's affordable outer suburbs will continue outperforming the broader market through at least 2026. The drivers are all still in place: **Population pressure.** Melbourne remains Australia's largest city by population. Interstate migration has reversed. International migration continues. These people need housing, and they're overwhelmingly settling in the affordable corridors. **Supply shortage.** Victoria's rental stock dropped by 20,000 properties over the last 18 months [7]. New construction is running well below the federal government's 1.2 million homes target. Every rental property that exits the market tightens the noose further. **Rate cycle.** The RBA is widely expected to begin cutting rates in early 2025, following the Fed's pivot to rate cuts in September 2024 [8]. Lower rates expand borrowing capacity, and the first dollar of additional borrowing capacity goes straight into the price of the most affordable stock. It's the entry-level suburbs that benefit first from rate cuts, not the premium ones. **Affordability convergence.** The same affordability dynamics that drove Perth and Brisbane's booms over the last four years are now pointing squarely at Melbourne's outer ring. When you compare price-to-income ratios across Australian capital cities, Melbourne's southeast is among the best value remaining [3]. I'm not saying Melbourne's inner ring will never recover. It will. But the sequencing matters for investors. The outer ring moves first. The inner ring catches up 2-3 years later. If you wait for Toorak to start growing before you buy in Cranbourne, you've already left tens of thousands of dollars on the table. I've spent the last 12 months telling anyone who'll listen to buy affordable Melbourne houses on large blocks. Every quarter that passes validates that call further. The data doesn't lie. It just requires you to look closer than the headline. ## References 1. [CoreLogic, 'Melbourne Quarterly Property Market Review Q4 2024', December 2024. Suburb-level heat map of 12-month price movements.](https://www.corelogic.com.au/) 2. [Australian Bureau of Statistics, 'Average Weekly Earnings, Australia', November 2024.](https://www.abs.gov.au/statistics/labour/earnings-and-working-conditions/average-weekly-earnings-australia) 3. [ANZ CoreLogic Housing Affordability Report, Q3 2024. Price-to-income ratios by capital city and region.](https://www.corelogic.com.au/news-research/reports/housing-affordability) 4. [PremiumRea internal transaction data and suburb scoring framework, 2024.](#) 5. [Domain, 'House Price Report — December Quarter 2024'. Melbourne median house vs unit price differential.](https://www.domain.com.au/research/house-price-report/) 6. [Australian Bureau of Statistics, 'Interstate Migration Estimates', September 2024. Victoria net interstate migration turning positive.](https://www.abs.gov.au/statistics/people/population/interstate-migration) 7. [Australian Financial Review, 'Victoria Loses 20,000 Rental Properties in 18 Months', 2024.](https://www.afr.com/property) 8. [Reserve Bank of Australia, 'Statement on Monetary Policy', November 2024.](https://www.rba.gov.au/publications/smp/) 9. [CoreLogic, 'Dwelling Values by Distance from CBD', 2024 annual data. Growth rates segmented by proximity to Melbourne CBD.](https://www.corelogic.com.au/) --- Source: https://premiumrea.com.au/blog/melbourne-property-not-growing-granular-data-truth Publisher: PremiumRea (Optima Real Estate) — Melbourne buyers agent