Melbourne’s Best Suburbs for Investors in 2025(Part 2)
- kyle36034
- Jul 2
- 12 min read
In Part 1 of this series, we explored three standout investment suburbs in Melbourne’s west and north — Melton, Coolaroo, and Werribee — each offering a compelling combination of affordability, rental demand, and long-term capital growth.
But Melbourne’s property investment story doesn’t stop there.
As Melbourne’s population continues to expand, so too does opportunity — and some of the most exciting investment potential in 2025 is now emerging in the southeast growth corridors and inner-west gentrification zones.
In this second part, we shift focus to:
Cranbourne – a thriving hub in Melbourne’s booming southeast with major infrastructure and family appeal;
Sunshine West – a rising star in the inner-west, set to benefit from the multi-billion-dollar Melbourne Airport Rail and Sunshine Superhub;
Frankston – a bayside suburb undergoing transformation, blending coastal lifestyle with investment value.
Each of these suburbs offers a different angle — from lifestyle-led growth to infrastructure-fuelled uplift — but all share the fundamentals that smart investors seek in 2025: tight rental markets, livability, connectivity, and long-term upside.
Let’s take a closer look.
Cranbourne (South-East Melbourne) – Fast-Growing Southeast Hub with High Rental Appeal
Key metrics: Median house price: ~$665,000; Median unit price: ~$480,000; Rental yields: ~4.1% (houses) and ~5.4% (units); Vacancy rate: ~1.4% .
Cranbourne, located about 50 km south-east of the CBD, has transformed into a bustling hub in Melbourne’s south-east growth corridor. Once on the fringe, it’s now a focal point for new housing estates and infrastructure. The median house price is around mid-$600k, reflecting solid growth in recent years yet still relatively affordable for many buyers in 2025. Rental yields are healthy – roughly 4.1% for houses, and notably 5.4% for units , indicating units in the area are in demand by renters. The vacancy rate is only ~1.4% , which underscores the high tenant demand in Cranbourne; properties don’t stay empty for long in this suburb.
Why it’s growing: Cranbourne offers a compelling mix of features that drive both owner-occupier and renter demand. It has a large number of new residential developments, which attract young families and investors. These estates often come with modern amenities and larger homes at prices far below inner Melbourne. As a result, Cranbourne has seen strong population growth, feeding into local shopping, schools, and community infrastructure. It’s a suburb that combines some capital growth momentum (as it transitions from semi-rural to fully suburban) with attractive yields, making it a dual-benefit location.
Amenities and infrastructure: The suburb (and its surrounding offshoots like Cranbourne East/West) hosts multiple schools, a major shopping centre (Cranbourne Park Shopping Centre), and sports facilities (including the Cranbourne Racecourse and Casey Fields sporting complex). Cranbourne also has a train line – it’s the terminus of the suburban Cranbourne line, which was recently duplicated to increase service frequency. The completion of the Cranbourne rail line duplication and associated level-crossing removals improved connectivity to central Melbourne (the new Metro Tunnel opening in 2025 will further enhance train services on this line). By road, Cranbourne connects via the South Gippsland Highway and is a short drive to the Monash Freeway, giving access to the city and other job hubs in the southeast. This infrastructure backbone is a major advantage.
Another growth driver is proximity to employment nodes: Cranbourne is within commuting range of the Dandenong South industrial zone and has emerging business parks of its own. Additionally, ongoing plans like the eventual extension of the rail line further to Clyde (in the longer-term pipeline) and new road upgrades (e.g., Thompsons Road and Hallam Road enhancements) signal continued investment in this corridor.
Outlook: Cranbourne’s trajectory is one of continued expansion and solid returns. For investors, it provides exposure to a high-growth population area with the benefit of immediate rental income (thanks to low vacancies and strong yields). As the suburb matures, land values should rise – indeed, even through the market’s recent ups and downs, Cranbourne has maintained growth, and demand remains robust. The tight rental market (vacancy ~1.4% ) suggests rents will keep climbing, supporting future yield. With the Casey region’s development in full swing, Cranbourne is likely to remain one of Melbourne’s best affordable investment suburbs for years to come. It’s a prime example of a suburb where capital growth and rental appeal intersect.
Sunshine West (Western Melbourne) – Inner-West Value with Improving Connectivity
Key metrics: Median house price: ~$675,500; Median unit price: ~$600,000; Rental yields: ~3.7% (houses) and ~4.7% (units); Vacancy rate: ~1.3% .
Sunshine West is an inner-western suburb just 14 km from Melbourne’s CBD, offering significantly more house for your money compared to the inner north or east. It provides inner-suburban access at a lower price point , which is a big draw for both investors and renters. With a median house price in the high $600k’s, it’s relatively affordable given the location. Rental yields are fair at ~3.7% for houses, and quite good at ~4.7% for units . The vacancy rate around 1.3% is very low, signaling consistently strong rental demand in the area . This tight vacancy can be attributed to Sunshine West’s proximity to transport links and jobs – tenants find it a convenient place to live, and investors rarely face long vacancy periods.
Local highlights: Sunshine West benefits from the spillover growth of the broader Sunshine area. While Sunshine (the adjacent suburb) is a well-known hub, Sunshine West has more of the traditional residential streets and some industrial precincts. The community here is diverse and growing, with many young families and immigrants choosing the area for its combination of commutability and community. It has numerous schools, local shopping strips, and parks. Crucially, residents of Sunshine West have easy access to major employment centers: the CBD is a short drive or train ride, the Sunshine town center (with its shopping plaza, restaurants, and soon-to-expand facilities) is next door, and the industrial/employment zones of the west (like in Brooklyn, Laverton North) are within quick reach via the highway.
Transportation and infrastructure: As an inner-west locale, Sunshine West is very well connected. It sits near the junction of the Western Ring Road (M80) and the West Gate Freeway, granting it superb road connectivity north-south and east-west. The Western Ring Road links the suburb to Melbourne’s northern suburbs and airport, while the West Gate (and soon the West Gate Tunnel) links it to the city and Port. This connectivity is a key reason the vacancy rate is low – many people working around Melbourne find Sunshine West centrally located. Public transport is also accessible: Sunshine West is served by Sunshine train station (a major rail hub) just a short drive or bus ride away, as well as Tottenham station to the east for some residents.
Looking ahead, Sunshine is earmarked as a major transport super-hub. The planned Melbourne Airport Rail (under construction) will route through Sunshine, turning it into a key interchange for regional, airport, and metro lines . This project, alongside the longer-term Suburban Rail Loop plans, essentially positions the Sunshine area as the “Southern Cross of the West.” For Sunshine West, that means property value uplift can be anticipated as these projects materialize – effectively, this suburb will be next to one of the most connected stations in Victoria. Furthermore, the government’s focus on developing Sunshine as a CBD-alternative (with new offices, education facilities, etc.) will likely bring more jobs and amenities to the region over time. All these improvements strengthen the case for Sunshine West as a strategic investment.
Outlook: Sunshine West presents as an undervalued inner-ring suburb with significant upside. Its current affordability relative to its distance from the city is a fundamental value proposition. The area already enjoys consistent rental demand (vacancy ~1.3% ) and is starting to see increased interest from both homebuyers and investors who are getting priced out of suburbs closer to the city. Over the next decade, as major infrastructure comes online, Sunshine West properties could appreciate notably. In the short term, investors can count on stable rents and the knowledge that they own in a location with improving prospects. It’s a classic case of buying in the path of progress: the inner west is a development focal point, and Sunshine West stands to reap the rewards, making it one of Melbourne’s best suburbs for property investment in 2025.
Frankston (South-East Bayside) – Bayside Affordability with Growth and Revitalization
Key metrics: Median house price: ~$730,000; Median unit price: ~$527,500; Rental yields: ~3.2% (houses) and ~4.1% (units); Vacancy rate: ~1.2% .
Frankston is a well-established suburb 53 km south-east of Melbourne, known as the gateway to the Mornington Peninsula. It offers a coastal lifestyle at a fraction of the price of suburbs closer to the CBD or inner bayside locales. Over the past year, Frankston’s house prices saw a slight dip (~1.1% down), now around $730k median, while units actually climbed ~7.1% . This indicates strong demand in the more affordable unit segment, likely driven by both first-time buyers and investors. Rental yields in Frankston are modest for houses (~3.2%) and decent for units (~4%+) , but what stands out is the extremely low vacancy rate of ~1.2% . Rental supply is very tight in this area, reflecting its popularity with tenants who value proximity to the beach, schools, and public transport. Essentially, nearly all available rentals are snapped up – a positive sign for landlords.
Investment appeal: Frankston hits a sweet spot by combining lifestyle and affordability. It’s rare to find a suburb with a beachfront, train line to the city, and a full-suite of infrastructure with a median house price around the low-to-mid $700k’s in Melbourne. This makes Frankston attractive not only to investors but also to a lot of owner-occupiers (including downsizers and families), which underpins capital growth. The minor correction in house prices over the last year presents a window for investors to buy in below peak values , before the next upswing gathers pace. Indeed, the pocket of Karingal in Frankston has been highlighted by buyers’ agents as “one to watch” for its strong amenities and connectivity . As a part of Frankston, Karingal’s success exemplifies the broader opportunity in the area – good schools, freeway access (EastLink/Mornington Peninsula Freeway), and shopping (Karingal Hub, Bayside Centre) are all driving renewed interest.
Infrastructure and growth: Frankston has undergone significant improvements and has more on the way. The Frankston Station precinct was upgraded in recent years, making the commute to Melbourne (just over an hour by train) more pleasant and secure. There’s a long-term plan to extend the suburban rail beyond Frankston to the Peninsula in the future, which, if realized, would further cement Frankston’s status as a transport hub. Road access is excellent: it’s the terminus of the Peninsula Link freeway and connects to EastLink, so driving to Melbourne’s eastern suburbs or the city is straightforward.
A standout development is the $1.1 billion Frankston Hospital redevelopment, the largest health infrastructure investment in Melbourne’s south-east, due to be completed by end of 2025 . This project will add a 12-storey tower, hundreds of beds, new surgical and maternity facilities, and more. The expanded hospital will not only provide better healthcare to the region but also boost local employment (during construction and ongoing). Such a significant project can be a game-changer for the suburb’s profile, attracting medical professionals and related services to the area, and generally increasing demand for housing. Additionally, Frankston’s city centre has been earmarked for revitalization with various council-led improvements to make it more pedestrian-friendly and encourage new businesses.
Outlook: Frankston is often described as a “city within a city” – it has its own CBD, beach, and institutions – and it stands to benefit from both metropolitan growth and local developments. The combination of bayside living, improved infrastructure, and relative affordability suggests a strong long-term capital growth trajectory. Investors in 2025 can leverage the current market softness (where houses are slightly down from their peak ) to secure property in a high-demand area. With rental vacancies at just ~1.2% , holding costs are mitigated by continuous rental income, and there’s potential to lift rents given the tight supply. As Melbourne’s population continues to expand and push outwards, suburbs like Frankston – which offer lifestyle without the inner-city price tag – are primed to thrive. It remains one of Melbourne’s top investment suburbs in 2025 for those seeking a blend of steady growth and livability.
Melbourne’s property landscape in 2025 presents a promising horizon for investors, especially in the affordable, high-growth suburbs profiled above. To recap, areas like Melton, Coolaroo, Werribee, Cranbourne, Sunshine West, and Frankston offer a compelling mix of value and upside. These suburbs share common strengths: entry prices well below Melbourne’s inner-city levels, strong rental yields supported by tight vacancies, and catalytic factors (population growth, infrastructure projects, or unique location advantages) that position them for above-average capital growth in the coming years.
For strategic investors, the key is to align opportunities with your portfolio goals:
Balance Yield and Growth: The suburbs highlighted can deliver a healthy rental income (some even approaching neutral or positive cash flow) and the potential for significant capital appreciation. This balance is ideal for building sustainable wealth – you can service the investment while awaiting growth. For instance, an investor might choose a higher-yield suburb like Coolaroo or Werribee units for cash flow, or a growth-focused pick like Frankston for capital gains – or a combination to balance the portfolio.
Leverage Infrastructure Timing: With Melbourne undergoing transformative infrastructure upgrades (transport tunnels, new hospitals, rail lines, etc.), timing your entry before project completion can yield dividends. The West Gate Tunnel, Airport Rail/Sunshine upgrade, and major health/education projects are all slated to complete or progress in the mid-2020s. Buying in nearby suburbs ahead of these completions allows you to ride the wave of buyer demand that often follows once benefits are realized. Keep an eye on project timelines and government announcements – they can signal the next “boom” precincts.
Due Diligence on Fundamentals: Even in these top picks, smart investors will drill down into micro-factors. Examine each suburb’s microlocation – e.g. proximity to schools, transport nodes, and employment hubs within the suburb – as this can affect tenant appeal and resale value. Look at recent sales trends and supply pipelines (are there many new developments that could flood the rental market, or is supply constrained?). In all the listed suburbs, supply is being absorbed by strong demand, but staying informed on local planning is part of a prudent strategy.
Long-Term Perspective: While 2025 is shaping up to be a year of recovery and growth for Melbourne, property investment is inherently a long-term game. Each of these suburbs has a long-range growth story (some over the next 5–10 years, with population doubling or major infrastructure coming). Investors should be prepared to hold for that horizon to fully capitalize on capital growth, all while enjoying interim rental returns. Short-term fluctuations (interest rate changes, economic shifts) will occur, but the strategic fundamentals of these locations suggest they can weather those and emerge stronger.
Melbourne’s affordable growth suburbs provide fertile ground for professional investors in 2025. By focusing on data-driven criteria – affordability, capital growth potential, rental yield performance, infrastructure, and vacancy rates – we’ve identified several suburbs that tick all the boxes. These areas are already demonstrating resilience and upside, supported by factual market data (e.g. low vacancies around 1% and rising demand ) and by on-the-ground improvements that enhance their desirability.
Investors who add one or more of these locations to their portfolio can position themselves ahead of the curve as Melbourne’s property cycle upswing gains momentum. Of course, it’s wise to consult local market experts and consider your own financial situation – but the overarching trends suggest that Melbourne property investment in 2025, when directed at the right suburbs, could yield excellent results. By being strategic and focusing on suburbs that balance affordability with growth, you’ll be tapping into the very markets set to lead Melbourne’s next chapter of property expansion.
Keep watching the metrics, stay updated on new developments, and you’ll be well-equipped to make the most of these opportunities in Melbourne’s property market. Happy investing in 2025!
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Sources
Craig Gibson, “10 Most Affordable Suburbs in Melbourne for Property Investment in 2025,” OpenAgent – Market data and suburb insights (median prices, yields, vacancy rates) for Melbourne suburbs, updated April 15, 2025
Hotspotting Price Predictor Index via Realestate.com.au News – Melbourne’s market outlook for 2025, noting 63% of suburbs on upward trend and affordable “battler” suburbs tipped for growth (Terry Ryder commentary), May 3, 2025
Quantum Buyers Agents, “Affordable Suburbs Melbourne 2025 for First-Time Investors,” Apr 23, 2025 – CoreLogic data on outer suburb price growth (2023–2025) and list of top affordable picks (including Melton, Werribee, Cranbourne), with median prices and yields
Victoria’s Big Build – Sunshine Superhub (Melbourne Airport Rail) – Project overview stating Sunshine upgrades enabling airport rail and future Melton line electrification (infrastructure boost for western suburbs)
Transurban, West Gate Tunnel Project (Melbourne) – Key benefits of the new tunnel (opening 2025) including up to 20 min reduced travel time from the western suburbs, improving connectivity for areas like Werribee and Melton
Peninsula Health, Frankston Hospital Redevelopment – Details on the $1.1B upgrade (completion 2025) adding capacity and services, the largest health investment in Melbourne’s south-east, bolstering Frankston’s infrastructure
Disclaimer:
The information provided in this article is for general informational purposes only and does not constitute financial, legal, or investment advice. While every effort has been made to ensure the accuracy and reliability of the data presented (including property prices, rental yields, and infrastructure details), no guarantees are given regarding its completeness or current validity.
Real estate market conditions, government policies, and infrastructure timelines are subject to change and may affect investment outcomes. Readers are strongly advised to conduct their own independent research and seek advice from licensed financial advisors, property professionals, or legal experts before making any investment decisions.
Core Elite Real Estate and the author(s) of this article disclaim all liability for any loss or damage arising directly or indirectly from the use or reliance on the information provided herein.
