First-home buyers return to action as Melbourne's sub-$600k sweet spot widens

First-home buyer activity is staging a quiet but steady comeback across Melbourne's market, with emerging pockets of genuine affordability reigniting competition in segments that had fallen dormant over the past 18 months.

The shift is most pronounced in the unit market, where the median has stabilised around $620,000 state-wide. Across Melbourne's inner suburbs—Coburg, Preston, and the mid-ring stretches of Footscray and Yarraville—agents are reporting increased foot traffic from first-home buyers willing to enter the market at revised expectations. Recent sales data shows units in these precincts trading between $480,000 and $580,000, a notable window for buyers who've been sitting on the sidelines.

"We're seeing first-home buyers come back with realistic numbers," says a consistent pattern across major agencies managing stock in these corridors. The psychology shift matters: buyers have moved past waiting for crashes and are instead targeting value in emerging renewal zones.

The Frankston corridor—long positioned as a growth corridor due to migration demand—continues to attract entry-level purchasers. House prices in suburbs like Seaford and Carrum Downs have settled into the $750,000–$850,000 range, making them viable for buyers with 15–20 per cent deposits and serviceable incomes. Similarly, the Craigieburn and Mickleham pocket in Melbourne's north offers land and townhouse options under $700,000, though competition for suitable stock remains keen at auctions.

What's shifted is buyer behaviour. Rather than chasing renovator's delight in established Bayside and Inner East suburbs—where prices remain stubbornly premium—first-home buyers are increasingly pragmatic. New apartment developments in Southbank, Docklands, and the emerging precincts around Footscray station are drawing interest, particularly among those prioritising accessibility over land size.

The auction market has also cleared somewhat. Earlier this month, clearance rates dipped to their lowest in over two years, creating breathing room for buyers to negotiate. This softening has been most pronounced at lower price points, where vendor expectations have adjusted faster than in premium pockets.

Real estate groups tracking first-home buyer registrations with the Victorian Government's First Home Owner Grant scheme report activity tracking above pandemic lows but below 2021 peaks—a normalisation rather than a boom. For now, the market is offering genuine choice for organised buyers with saved deposits and solid serviceability. The window may not stay open indefinitely as rates stabilise and investor activity resumes.

This article was compiled by AI from the sources linked above and screened before publishing. See our editorial standards.