Whether now is a good time to buy property in Melbourne depends heavily on your specific goals (e.g., long-term investment, finding a home to live in) and financial situation, as experts forecast a market that is poised for strong growth in 2026 after a period of underperformance.
The 2% property rule is a real estate investing guideline where you check if a rental property's monthly rent is at least 2% of its purchase price, indicating strong potential for positive cash flow and profitability; you calculate this by dividing the monthly rent by the property's total price and multiplying by 100, aiming for 2% or more to deem it a good deal, though it's a simplified metric, notes Rentana and Abacus Finance.
We assess them based on what 2025 is showing us.
Yes, buying a house in Australia in 2025 can be worthwhile for long-term wealth, supported by low supply, population growth, and rising rents, despite higher interest rates making borrowing costlier; strong capital cities like Perth, Brisbane, Adelaide, and regional hotspots like Toowoomba show resilience, but success depends on strategic location choice, bigger deposits, and understanding costs like stamp duty, with potential market pauses before rate cuts potentially shifting dynamics.
The Domain House Price Report for the June 2025 quarter has been released with Melbourne median house price increasing by 2.3% ($23,585) to $1,063,719. Units are also performing strongly with a quarterly increase of 2.7% to $573,600.
Melbourne's overall outlook for 2025–2027 is very optimistic. After a mild dip, property values are rebounding, and experts predict Melbourne will lead the nation in price growth over the next two year.
To buy a $650,000 house in Australia, you generally need a gross annual household income between $100,000 to $140,000, with figures varying significantly by location and lender criteria, requiring a strong deposit (around $130,000 for 20%) and managing loan repayments to not exceed 30% of your income to avoid mortgage stress, often necessitating a joint income or substantial savings, as highlighted by financial experts and data from sources like Fundd, Finder, and Real Estate.
Suburbs set for a boom in 2025, particularly in Australia, are driven by affordability, lifestyle appeal (beaches, cafes), infrastructure (new transport links), and demographic shifts, with hotspots identified in Perth's northern coastal areas (Alkimos, Yanchep), Regional Queensland (Toowoomba), Melbourne's outer areas (Werribee, Keilor East), and Brisbane's growth zones (Springwood, Gold Coast's Coomera), as people seek value and better living environments outside major city centers.
Using this free income calculator, the approximate income you need to buy a $500,000 home, assuming you need a $400,000 loan, is $77,000 gross per year, excluding superannuation.
Will Mortgage Rates Ever Go Down to 3% Again? While it's possible that interest rates could return to 3% territory in the future, it's highly unlikely that it'll happen anytime soon. In fact, some experts say it won't happen again without another major economic shock like the one caused by the COVID-19 pandemic.
People have been leaving Melbourne primarily due to high housing costs, seeking more affordable lifestyles and space in regional areas or other states like Queensland, a trend accelerated by the COVID-19 pandemic's remote work opportunities. Other factors include a desire for warmer weather, perceived lifestyle quality (more relaxed pace), concerns about cost of living, transport issues, and, for some, frustrations with state governance and increased crime, although recent data suggests the outflow might be slowing as other areas become less affordable.
Other suburbs with low vacancy rates that we've identified as investment-worthy suburbs for 2025 include Coburg (0.8%), Ferntree Gully (0.9%) and Altona North (1.2%). These areas provide a mix of high rental demand, strong returns and potential for capital growth.
Some of the lowest-risk real estate investments are:
The 1% rule in real estate investing is a quick guideline that suggests a rental property is a good investment if its monthly rent is at least 1% of its purchase price (including repairs), helping investors screen for potential positive cash flow before diving into detailed analysis. For example, a $300,000 property would ideally rent for $3,000/month ($300,000 x 0.01). While useful as a starting benchmark, it's a simplified tool that doesn't account for all expenses like taxes, insurance, or vacancy, and its effectiveness varies significantly by market.
The 30% rule advises consumers spend no more than 30% of their monthly income on their mortgage or rent payments, leaving wiggle room in case of unexpected expenses, job loss, family planning, and other goals.
AB 1482:
On a $100k salary in Australia, you might borrow between $330,000 and $600,000, but it highly depends on lender policies, interest rates, existing debts (car, credit cards), living expenses, and deposit size, with many lenders using serviceability buffers, suggesting figures closer to the lower end, while others might offer more if you have minimal expenses and debt. Use an online borrowing calculator from banks like NAB, CommBank, or ING for a personalized estimate.
To comfortably afford a 400k mortgage, you'll likely need an annual income between $100,000 to $125,000, depending on your specific financial situation and the terms of your mortgage.
Fastest-Growing Suburbs for Investment in Victoria (2025)
The Indian government continues to strengthen its support for affordable housing in 2025, making it an opportune year for homebuyers. Key programmes like Pradhan Mantri Awas Yojana (PMAY) remain active, alongside state-level incentives that reduce the cost of purchasing a home.
🏆✨ It's official — Lane Cove is Australia's Most Liveable Suburb! Voted #1 in the 2025 National Liveability Census, Lane Cove scored top marks for safety, green spaces, and community spirit.
In Australia, the middle-class income range is generally considered to be between 75% to 200% of the median income, which translates roughly to $48,000 to $130,000 annually for individuals, though figures vary by definition (personal vs. household) and year, with some placing the core middle at $90k-$140k household income, supporting a lifestyle of home ownership and family activities, but facing rising costs.
A $1 million retirement fund in Australia can last anywhere from under 20 years to over 30 years, heavily depending on your annual spending, investment returns, and whether you receive the Age Pension, with $40,000-$50,000/year lasting longer (30+ years) and higher spending (e.g., $60,000+/year) depleting it much faster (20-25 years), while combining with the Age Pension significantly extends its longevity.