Key takeaways
- This is a December 2023 forecast, kept as a record of the call. Treat the suburb picks as historical, not as a current shortlist.
- Most suburbs named — Flemington, Point Cook, Spotswood — are established-housing markets that foreign buyers cannot access until 30 June 2029.
- House yields quoted were low by Melbourne standards — around 2.8–2.9% gross — reflecting the usual trade-off where houses grow in value while units generate income.
- The growth thesis rested on Melbourne's north and north-west corridors plus the Mornington Peninsula, on affordability and gentrification rather than on new supply.
- A Singaporean buyer looking at these areas realistically needs new-build or off-the-plan stock within them, not resale houses.
Every "Melbourne suburbs to watch" list you will read has the same problem, and almost none of them mention it: they rank established houses.
Foreign buyers cannot purchase established dwellings in Australia until 30 June 2029. So a list telling you Flemington, Reservoir or the Mornington Peninsula is undervalued is describing a market you are not allowed to enter.
This page used to be one of those lists — a December 2023 forecast for 2024. It is kept at this address because the underlying question is a fair one. But the useful version is not "which suburb will boom." It is "where can I actually buy, and does the suburb around it hold up."
Why the suburb lists do not apply to you
Those rankings are built on median house prices, historical growth and rental yields for existing stock. Every input is drawn from a market closed to a foreign purchaser.
Worse, the yields quoted are often weak. That 2024 list put Flemington houses at 2.83% gross. Before costs. Before an 8% foreign purchaser duty you would also have paid. As an investment case for an overseas buyer that is not close to working — and Flemington was one of the suburbs being recommended.
What actually determines your options
Your universe is new dwellings: off-the-plan, or unsold developer stock in a completed building. That is a few dozen projects at any one time, not 400 suburbs. The choice is smaller and the analysis is different.
What matters is no longer "is this suburb undervalued" but four narrower questions.
1. Is there tenant demand within walking distance?
Not suburb-level demand — walking distance. A station, a university campus, a hospital, a major employer. Melbourne vacancy has sat near 1.1%, but that is a city average hiding enormous variation between an apartment beside Richmond station and one twenty minutes from anything.
2. What else is completing nearby, and when?
This is the question almost nobody asks and it does more damage than suburb choice. If a 300-apartment building finishes two streets away in your settlement year, you are leasing into a glut you could have seen coming. Ask for the pipeline within a kilometre.
3. How many apartments are in your building?
A 500-unit tower means your apartment competes with hundreds of near-identical ones every time you lease or sell. A 115-apartment building does not. Scale affects your resale more than the suburb's median does.
4. Does the entry price survive the surcharges?
On an A$800,000 apartment a foreign buyer pays roughly 5.5% general duty plus 8% foreign purchaser duty — about A$108,000 — plus FIRB, then the absentee owner land tax surcharge annually. A suburb being "undervalued" does not offset that. A sensible entry price and a real yield does.
Where the new stock actually is
New apartment supply in Melbourne clusters in a handful of places, and that is where a foreign buyer's realistic choices sit:
- Southbank and the Arts Precinct — the deepest supply, which cuts both ways: more choice, more competition at lease and resale
- The CBD north edge, around La Trobe Street — closest to RMIT and the University of Melbourne, so student and young-professional demand is structural
- St Kilda Road — larger apartments, older buyers, less student churn
- Docklands and Collins Wharf — waterfront, newer, thinner rental history
- Established middle suburbs like Highett, where occasional new developments appear in areas that are otherwise closed to you
That is the honest map. Five areas, not a top-ten suburb list.
The market context, stated plainly
Melbourne house values fell 1.2% and units 0.2% over the year to June. The 2024 forecast this page once carried — a rebound reclaiming 2022 losses — did not happen.
I am leaving that on the record rather than quietly deleting it, because the useful lesson is about the genre. Suburb forecasts are published because they get read, not because they are reliable. Treat the next one you see the same way.
What I would ask before buying anywhere
- Vacancy and achieved rents for that postcode and that configuration — not the city average
- What is completing within a kilometre in your settlement window
- How many apartments are in the building, and how many are already sold
- Total cost including every Victorian surcharge, and the net yield after all of it
- Whether the building is off-the-plan or completed — completed means you can inspect it, and unsold developer stock is still open to you under FIRB
If you want a shortlist you can actually act on
Tell me your budget, and whether this is investment or somewhere family will live. I will send you what is genuinely available to a foreign buyer at that price, with the supply pipeline nearby, achieved rents for comparable apartments, and a net yield.
It will be a shorter list than a suburb ranking. Every item on it will be something you can legally buy.