Although real estate is far from a new topic, it remains highly relevant as housing markets continually evolve and differ across countries, shaped by economic conditions, housing demand, cultural preferences and local lifestyles.
Moving to Melbourne as an international student sparked my curiosity about the city’s housing market, particularly the contrasting advice people often share about where to buy property: choosing expensive areas for their perceived stability, buying in more affordable locations before prices rise, or following areas that have recently experienced rapid price growth.
But how reliable are these familiar assumptions when examined over a longer period?
To explore this question, I analysed 30 years of median house price data (1995–2025) across Melbourne’s 31 local government areas (LGAs), using figures published by Valuer-General Victoria (2026). The analysis investigates how patterns of price growth have shifted over time, which types of areas have led during different periods, and whether these common property-buying approaches have consistently outperformed the average growth rate across Melbourne’s LGAs.
Rather than forecasting future prices or providing investment advice, my aim is to offer a historical, data-driven perspective for anyone interested in understanding Melbourne’s housing market.
Melbourne’s most expensive areas have remained remarkably consistent, while the areas experiencing the strongest house price growth have shifted over time.
Since 2002, the same five areas: Boroondara, Stonnington, Bayside, Port Phillip and Glen Eira, have occupied Melbourne’s top five positions for median house prices every year, although their order has varied. Yet high property prices have not always been accompanied by faster growth.
How to read the chart: each square is one LGA, placed approximately by its geographic position; dark outlines mark the six priciest LGAs at the end of the selected period. Use the play button or slider to explore how the geography of house price growth has changed across different periods. Hover a square for its figures.
House price growth across Melbourne Faster than Melbourne Slower than Melbourne Six priciest LGAs
Source: Valuer-General Victoria (2026), A Guide to Property Values 2025. Median house sale price, calendar years. Colour = the LGA’s annualised growth in median house price minus that of the Melbourne Metropolitan Area (Valuer-General median), in percentage points a year. The layout is schematic, not to scale.
Melbourne’s housing market has not consistently favoured either expensive or cheaper areas.
Between 2011 and 2016, for example, the ten most expensive areas grew by 8.9% a year, compared with 4.7% for the ten cheapest, a gap of more than four percentage points a year. Yet the lead has changed hands several times since the late 1990s, long before COVID-19.
During 2019–2021, the pattern was more complex: mid-priced areas grew faster than either end of the market.
How to read the chart: each point compares the average annualised house price growth of the ten highest-priced and ten lowest-priced areas, ranked at the start of each five-year window. Use the buttons to change the window length or compare areas within the same geographic ring. Hover a point for its figures.
Growth gap Above zero: pricier areas grew faster Below zero: cheaper areas grew faster
Source: Valuer-General Victoria (2026), A Guide to Property Values 2025. Within a ring the comparison is 4 v 4; points sit at each window’s middle year. Windows overlap, so neighbouring points are not independent, and the pattern is not a forecast. Dotted lines: First Home Owner Grant (2000), First Home Owners Boost (2008–09) and Victoria’s first-home-buyer duty exemption (2017) (State Revenue Office Victoria, n.d.-a, n.d.-b), shown as context, not causes. Shaded band: COVID-19 era.
Which kinds of areas led Melbourne’s house price growth? The answer changed between the two Census periods.
In 2011-16, growth favoured areas with higher price-to-income ratios and fewer detached houses. By 2016-21, the pattern had reversed, with lower price-to-income ratios and more detached houses associated with faster growth.
The reversal was striking: Melton climbed from 31st to 6th in growth rankings, while Stonnington fell from 3rd to 30th. These two housing characteristics reflect an overlapping divide between denser areas and detached-house suburbs, rather than separate causes of price growth.
How to read the chart: each dot represents one local government area, with higher dots indicating faster annual house price growth. Use the buttons to compare house prices relative to local incomes or the share of detached houses, then press ▶ to move from 2011–16 to 2016–21. Hover a dot for its figures.
Sources: Valuer-General Victoria (2026), A Guide to Property Values 2025; Australian Bureau of Statistics (2022), Tables T01, T02 and T18. Price-to-income = median house sale price ÷ (median weekly household income × 52) at the start of each period; it compares prices with the incomes of all local households, not what any household can afford. Detached-house share = ABS “separate houses” ÷ occupied private dwellings. Correlation = Spearman rank correlation across the 31 LGAs.
Buy in the most expensive areas, choose cheaper locations with room to grow or follow the areas where house prices have recently risen fastest? These are three familiar approaches to choosing where to buy, but how well have they performed over time?
To find out, each rule selects eight of Melbourne’s 31 local government areas at the start of a five-year period. Their subsequent annualised house price growth is compared with the average across all 31 areas.
None of the three rules consistently came out ahead. Across 21 overlapping five-year periods, selecting the most expensive areas beat the average eight times, choosing the cheapest did so ten times, and following recent growth leaders just five times. The last approach performed worst by these measures, falling behind the average by approximately 0.6 percentage points a year on average.
How to read the chart: each cell shows the difference between the selected eight areas’ average annualised house price growth and the 31-area average, in percentage points per year. Hover a cell to see the eight areas selected.
Compared with the 31-area average Faster growth Slower growth (not necessarily falling house prices)
Source: Valuer-General Victoria (2026), A Guide to Property Values 2025. “Recent winners” = the eight LGAs with the fastest growth over the previous five years. The six columns are fixed periods; the last (2021–25) covers four years because the data end in 2025. The counts on the right use 21 overlapping windows (2000–05 to 2020–25), so they are not independent trials.
Melbourne’s most expensive areas have largely stayed expensive, but the areas leading house price growth have repeatedly changed. For prospective buyers, this suggests that recent price growth alone may be a poor guide to choosing where to buy, compared with considering personal needs and financial circumstances. What began as my curiosity about Melbourne’s housing market as an international student has revealed a more complex picture than the familiar buying advice I first encountered. This analysis examines nominal median house prices, excluding rental income, borrowing costs and other investment expenses, and should not be treated as investment advice. Future research could explore how access to schools, public transport and green spaces relates to these shifting patterns.
Area: the 31 local government areas (LGAs) of Greater Melbourne. Two data sources are used, both loaded in R from files downloaded from the publishers: Valuer-General Victoria’s A Guide to Property Values 2025 (PDF; LGA tables of median house sale prices, 1995–2025, extracted with the pdftools package) and the ABS 2021 Census Time Series Profile DataPack for Victorian LGAs (2011, 2016 and 2021 Censuses on 2021 boundaries, Tables T01, T02, T18 and T29). House prices are calendar-year median sale prices of houses (not units). Growth over a period = (median in end year ÷ median in start year)1/years − 1. In chart 01 the benchmark is the Valuer-General’s median for the Melbourne Metropolitan Area; in charts 02 and 04 it is the simple average across the 31 LGAs. All values are nominal (not adjusted for inflation). Data were processed and charted in R (R Core Team, 2025). The tile layout and the inner/middle/outer ring grouping (data/tile_layout.csv) were created by the author from the approximate geographic position of each LGA; that file contains no statistical data.
Robustness checks. Chart 01: LGA price rankings are very stable (Spearman 0.94 between 1996 and 2025). Chart 02: a Spearman rank correlation using every LGA, not just the two ends, shows the same reversals (correlation with the growth gap 0.91–0.98 across all nine button combinations); in 2019–21, grouped by 2019 price, the 10 priciest LGAs grew −0.4, the middle 11 +2.1 and the 10 cheapest −1.9 points a year relative to the average. Chart 03: both reversals hold with Pearson correlations and when any single LGA, or the most extreme LGAs, are left out. Other Census measures showed weaker or no consistent links (renting households, population growth, income growth); the share of university-educated residents also reversed (+0.75 → -0.71) but closely tracks house prices (Spearman 0.93), so it is not shown. Chart 04: ties in the selection are broken alphabetically; this affects one 1996 cell (+2.4, or +1.7 with the alternative pick).
Australian Bureau of Statistics. (2022). 2021 Census DataPacks: Time Series Profile, Local Government Areas, Victoria [Data set]. https://www.abs.gov.au/census/find-census-data/datapacks
R Core Team. (2025). R: A language and environment for statistical computing (Version 4.5) [Computer software]. R Foundation for Statistical Computing. https://www.R-project.org/
State Revenue Office Victoria. (n.d.-a). Duty reduction for first home buyers: Current rates. Retrieved October 24, 2026, from https://www.sro.vic.gov.au/about-us/rates-and-statistics/current-rates/duty-reduction-first-home-buyers-current-rates
State Revenue Office Victoria. (n.d.-b). First home buyer grant and bonus amounts. Retrieved October 24, 2026, from https://sro.vic.gov.au/first-home-buyer-grant-and-bonus-amounts
Valuer-General Victoria. (2026). A guide to property values 2025. Department of Transport and Planning. https://www.land.vic.gov.au/__data/assets/pdf_file/0030/775614/a-guide-to-property-values-2025.pdf