Melbourne house prices 2024: Affordability bites as just 16 suburbs are now below $600k mark

The Victorian government is facing calls to expand its primary assistance program for first-home buyers, with fewer than 20 Melbourne suburbs left with home prices below $600,000.

Just 16 areas now offer homes at the affordable benchmark, which is the cap for would-be homebuyers hoping to avoid a price stamp duty payment.

A year ago there were more than 20 (see the full list below).

Aussies getting trapped in ‘mortgage prison’
Investor’s surprise move as portfolio hits 35 homes

The list includes Melton, Broadmeadows, Wyndham Vale and Frankston North.

Ms Flaherty said this was a warning that the government needed to expand its support schemes for first-home buyers.

At present market entrants do not have to pay stamp duty for purchases up to $600,000, in the most widely used support program for homebuyers in the state.

35 Waverley St, Broadmeadows - for herald sun real estate

But the assistance program introduced in 2017 has not had its no-stamp-duty cap increased since it was implemented, though first-home buyers only pay a portion of the tax for purchases worth up to $750,000.

In the 2023-24 financial year almost 33,000 Victorians applied for their stamp duty to be reduced or waived.

“There are very few suburbs where they can buy a house now,” Ms Flaherty said.

Realestate.com.au economist Anne Flaherty.

Property Home Base founder and flat-fee buyer’s advocate Julie DeBondt-Barker said first-home buyers needed the government to raise the stamp-duty free threshold, with 16 suburbs simply not enough.

“First-home buyers are starting to get frustrated, and most are having to go above that to $650,000 to be anywhere they want to be,” Ms DeBondt-Barker said.

“So they are feeling pretty fatigued right now. A lot of them are saying they will have to wait for prices to come down … and that’s not going to happen.”

13 Watson Court, Melton - for herald sun real estate

13 Watson Court, Melton recently sold for $430k. Melton is one of the suburbs that is still affordable for first-home buyers.

She added that with early signs of gentrification suburbs like Broadmeadows, Meadow Heights and Frankston North were unlikely to have house prices below $600,000 by the end of 2025.

Barry Plant Melton’s Ned Nikolic said the suburb had retained its position as Melbourne’s most affordable pocket because an influx of housing estates in Bacchus Marsh further out had led first-home buyers to leapfrog the suburb.

But a rising number are now concentrating on the affordable pocket, particularly from across Melbourne’s west, while interstate investors are increasingly snapping up its homes for under $500,000.

Mr Nikolic said he wasn’t expecting the suburb to remain affordable forever.

“I’ve been selling in Melton for 18 years and when I started it was still the cheapest area in Melbourne, but homes were under $200,000,” Mr Nikolic said.