Most people look at Melbourne’s property market right now and see a city that’s been sitting flat for a few years. Underneath those flat headline numbers, three of the biggest infrastructure programs in Australian history are actively changing which Melbourne suburbs are worth living in — and which ones are worth putting your money into. A brand new underground rail network that just opened. A $34.5 billion orbital rail line is being built right now. And a planning overhaul that has already legally rezoned more than 60 station precincts across the city for high-density development.
The Next Growth Suburbs sitting directly in the path of all of this are still — in many cases — priced as though none of it is actually happening. That gap between what the data shows and what the market has figured out yet is exactly what this guide is about.
3 Reasons Prices Are About to Move In Melbourne’s Next Growth Suburbs
Before getting into the specific suburbs, it helps to understand what’s driving the change. Because these three programs are what separate the suburbs worth watching from the ones that will just drift along with the broader market.
The Metro Tunnel opened on 1 February 2026 — This isn’t something that’s been announced or promised and it quietly changed the commute for an entire stretch of Melbourne’s southeast. No transfers. No delays. Just a fast, direct run into the city.
The Suburban Rail Loop East is the big one — $34.5 billion committed. $14.1 billion in construction contracts already awarded and signed. Tunnel boring machines physically on site. Target opening: 2035. There is nothing else like this being built anywhere in Australia right now.
The Activity Centres Program — In the pilot centres, developers can now get fast-tracked planning approval without going through the normal review process. That dramatically reduces the time and risk of building — which pushes land values up. In several of these suburbs, the legal change has already happened. The price movement is still catching up.
What are Melbourne’s Next Growth Suburbs?
Epping — The Strongest Overall Case
Median house price: $730,000. That’s 23% below Melbourne’s median. House rental yield: 4.0% — the highest of any suburb in this entire analysis. And not one but three confirmed, already-funded infrastructure projects underway right now.
The Northern Hospital expansion is the largest health infrastructure project currently under construction in the whole of Victoria. Total program: $813 million. That’s permanent healthcare employment arriving in waves, right on Epping’s doorstep, that isn’t going anywhere. Epping is also one of only 10 pilot Activity Centres with planning controls already legally enacted. Development up to 12 storeys in the station core zone. Fast-tracked approvals already applying today.
And a $2 billion mixed-use development called “New Epping” from developer Riverlee has Stage 1 construction commencing now. Three separate confirmed catalysts. A price sitting nearly a quarter below Melbourne’s median. A 4% yield that makes the holding costs genuinely manageable. Epping has the strongest combination of data points of any suburb in this analysis — and it’s still sitting under the radar for most investors.
Springvale — The Fastest-Growing Suburb Nobody Is Talking About
Springvale recorded 9.5% house price growth in the 12 months to late 2025. The strongest of any suburb in this entire analysis. And it’s still $370,000 cheaper than Clayton — one stop up the same rail line with exactly the same Metro Tunnel access.
That price gap is the story here. Springvale has the same train line. The same direct CBD access. Proximity to the Dandenong employment cluster with over 66,000 workers. Activity Centre planning controls already enacted via GC252. Developer money is moving into Springvale. Retail investor money hasn’t caught up yet. That’s the window.
Clayton — Where You Can Actually Watch the SRL Being Built?
Clayton is the most physically advanced SRL construction site in Melbourne right now. You can drive past and see it. Diaphragm walls going up. Station box excavation underway. Carinish Road permanently closed for construction.
When SRL East opens in 2035, Clayton becomes one of the most connected suburbs in Melbourne — the SRL orbital, the Metro Tunnel Cranbourne/Pakenham line, and Gippsland regional rail all meeting in one place.
Clayton’s house prices grew 8.6% in the past 12 months — double Melbourne’s average. History consistently shows that the biggest price uplift near new rail infrastructure happens in the two to five years before a project opens — not after the ribbon is cut. If that pattern holds here, the window for entry at current prices is narrowing with every month of construction completed.
Dandenong — Deep Value With Institutional Backing
Dandenong sits at $735,000 — 22% below Melbourne’s median. Unit rental yield of 5.4%. Vacancy rate of an estimated 0.7% — less than one-third of Melbourne’s city-wide average. The Dandenong South NEIC employs over 66,000 workers in a genuinely diversified employment base.
In October 2024, the Victorian Planning Minister approved Capital Alliance’s $2 billion ‘Little India’ masterplan — 480-plus dwellings, a hotel, health and education facilities. Stage 1 construction begins in 2026.
Here’s the thing about institutional capital approving a $2 billion masterplan in a suburb. That isn’t done lightly. The due diligence that goes into a decision like that is extensive. When that approval comes through, it’s a very public signal that sophisticated money has looked hard at the fundamentals and decided they stack up. That’s not a reason to avoid Dandenong. It’s a reason to pay close attention to it.
Footscray — The Contrarian Case That’s Harder to Ignore Than It Looks
Footscray’s 12-month house price data shows -4.4% growth. On the surface, that sounds like exactly the wrong suburb to consider. The actual case for Footscray is unusual. It is the only suburb within 5km of Melbourne’s CBD where you can still buy a house for under $1 million. The $1.5 billion Footscray Hospital opened in 2025 — bringing permanent healthcare employment right into the suburb. The West Gate Tunnel is open, cutting 20 minutes off the CBD commute from the west. Unit rental yields are sitting at 5.9% — the highest of any suburb in this entire analysis.
The short-term data looks uncomfortable. The underlying fundamentals — 5km from the CBD, a brand new hospital, a major new road tunnel, sub-$1 million houses — are hard to argue with when you look past the headline number.
Bundoora — The Patient Investor’s Play
Bundoora isn’t a suburb where you buy and watch prices move in the next six months. It’s a suburb where you buy because a 30-year transformation has already started and a serious development partner has already signed on.
La Trobe University’s ‘City of the Future’ masterplan will convert 255 hectares of the campus into a genuine mixed-use neighbourhood — 9,300 new homes, 33,500 jobs, and $440 million in annual economic output once complete. Plenary Group is the signed master development partner. The $82 million University Health Clinic broke ground in 2025.
At $888,000 with a 5.1% unit yield, Bundoora gives you reasonable cash flow while you wait for a transformation that has real funding and real construction behind it. This isn’t a speculative bet on something that might happen. It’s a patient position in a suburb where something credible is genuinely already underway.
Heidelberg — A Price Gap That Doesn’t Make Sense
Heidelberg sits 11km from the CBD and is $175,000 to $625,000 cheaper than Ivanhoe right next door — despite having better public transport, a larger hospital, and Activity Centre designation that Ivanhoe doesn’t have. The Victorian state government has taken over planning responsibility from Banyule Council — which in practice typically means more density approved, not less.
House prices grew 7.7% in the past 12 months. A major hospital employer that’s expanding, not contracting. And a price sitting well below its immediate neighbours for reasons that don’t hold up when you look at the actual fundamentals.
Oakleigh and Preston — Buy Before the Controls Are Confirmed
Both suburbs have Activity Centre proposals moving through the system. Oakleigh has a 16-storey development proposed in its station core. Preston is already an enacted pilot centre. Both have had level crossing removals complete, improving streetscapes and local amenity. Both sit close enough to the inner ring to catch the gentrification wave moving steadily outward from more established suburbs.
The key variable is timing. Oakleigh’s Activity Centre controls aren’t enacted yet — which is exactly why prices haven’t moved sharply. When the controls are confirmed, the same uplift mechanism that’s already playing out in Springvale and Epping kicks in. The investor who buys before confirmation captures the uplift. The one who waits for certainty buys in after most of it has already happened.
What to Buy — and What to Be Careful About
Buy houses near Activity Centre stations where the rezoning has legally happened but prices haven’t fully reflected it. The uplift is already in the planning documents. The market is still catching up.
Buy houses in suburbs with large apartment pipelines. In Clayton, Footscray, and Springvale, the house market and the unit market are genuinely moving in opposite directions right now. New apartments lift the suburb’s broader profile and demand while house supply stays tight. Buying a house gives you the suburb’s uplift without being exposed to what’s happening in the apartment market.
Clayton units dropped 8.7%. When hundreds of new apartments hit the market at settlement, they compete directly with each other — which puts real pressure on both prices and rental yields in the short to medium term. The house in the suburb and the off-the-plan apartment in the same suburb are very different investments right now.
The Tax Side of Things — Don’t Skip This Part
Victoria dropped its land tax threshold for investors from $300,000 to $50,000 in January 2024. A lot of investors who previously paid zero land tax are now getting annual bills they didn’t expect. The absentee owner surcharge doubled to 4%. A Vacant Residential Land Tax applies statewide from 2025.
None of this makes Melbourne the wrong place to invest. It makes doing the full numbers before you commit more important than it’s ever been. Suburbs with yields above 4% — Epping at 4.0%, Dandenong at 3.7% — absorb these holding costs much more comfortably than suburbs sitting at 2.8% or 3.0%.
Build your full holding cost model before you buy. Include land tax at current thresholds. Run the numbers at today’s interest rate and at 1–2% higher. Don’t discover what the real holding cost is after you’ve already settled.
Where are the Data Points Most Clearly?
When you score each suburb across price discounts to Melbourne’s median or comparable neighbours, rental yield, infrastructure catalyst strength, and recent growth momentum, three suburbs stand clearly above the rest.
Epping scores 34 out of 40. Priced 23% below Melbourne’s median. 4% house yield. $813 million hospital under construction. Activity Centre controls already enacted. Three separate confirmed catalysts running simultaneously.
Springvale and Dandenong both score 31 out of 40. Springvale for its 9.5% growth momentum and enacted planning controls on the Metro Tunnel line. Dandenong for its deep value position, 5.4% unit yield, 0.7% vacancy rate, and $2 billion approved private masterplan.
Final Thought on Melbourne’s Next Growth Suburbs
Melbourne’s flat performance over the past few years has created something you don’t see very often — a city with genuinely strong underlying fundamentals that’s still trading at a discount to every other major Australian capital and to its own long-term history. These aren’t gut-feel calls. They’re data points that simply don’t reconcile with the idea that Melbourne is a market to step back from. The infrastructure is physically being built. The planning controls are already legally in place. The population keeps growing every single year. The recovery cycle — by every major forecaster in the country — has already begun.
At NextHouse, every piece of analysis we publish is built on data you can go and verify yourself — not on narrative, not on optimism for its own sake. If any of these suburbs caught your eye or you want to talk through what the numbers actually mean for your situation, our team is happy to have that conversation — no pressure, just a genuine chat.
FAQs
- Why has Melbourne’s property market underperformed in recent years? A few things hit at once — high land tax, long COVID lockdowns, rising interest rates, and a wave of apartment completions in certain suburbs. None of that has changed the underlying story though. Infrastructure keeps being built, and the fundamentals remain solid. The price just hasn’t caught up yet.
- What is Amendment GC252 and why does it matter? It’s a planning change that became law in April 2025. It rezoned land within 400–800 metres of 10 Melbourne station precincts for high-density development with fast-tracked approvals. Developments near these stations now get approved faster and with less risk. That pushes land values up — and in several suburbs, the price hasn’t reflected it yet.
- Is the Suburban Rail Loop actually going ahead? Yes. Over $14.1 billion in contracts are signed. Tunnel boring machines are on site. Excavation has started at Clayton. The amount of money already committed makes cancellation extremely costly — and that barrier gets higher every month construction continues.
- Why is Footscray showing negative growth if it’s worth considering? The negative figure is almost entirely driven by new apartments settling — which pulls the overall median down. The house market in Footscray is a completely separate story with much tighter supply. It’s a good reminder that headline suburb medians can be genuinely misleading.
- How do I find out if a property is inside an Activity Centre boundary? The Victorian Planning Authority has a free interactive map showing the exact boundaries of every Activity Centre zone. Properties within 400 metres of the designated station tend to attract the most uplift and developer interest.
- What’s the most important thing to do before buying in these suburbs? Run the full holding cost model before you commit — land tax, management fees, maintenance, and mortgage repayments at today’s rate and at 1–2% higher. Make sure it works under realistic conditions, not just perfect ones. Suburbs with yields above 4% like Epping and Dandenong give you a lot more breathing room.
Disclaimer: This report is for educational and informational purposes only. It does not constitute financial, investment, or legal advice. Always seek professional advice before making property decisions.
