Melbourne Suburbs I’d Steer Clear Of – Insights from a Pro Buyer’s Agent

Melbourne is one of Australia’s most dynamic and liveable cities, offering diverse property investment opportunities.

However, as a seasoned buyer’s agent, I’ve seen firsthand how not all suburbs are created equal. While some areas promise strong capital growth and rental yield, others carry risks that may outweigh their potential rewards.

Whether you’re a first-time homebuyer or an investor, avoiding the wrong suburbs can save you from costly mistakes.

Here are some areas around Melbourne I’d approach with caution—and why.

Outermost Urban Fringe

The outer fringe suburbs have exploded in popularity due to affordability, especially for first-home buyers. While the lower entry point might look appealing, these areas come with risks:

• Oversupply of land and housing: Many estates are cookie-cutter developments, which limits scarcity—a crucial driver of capital growth.
• Infrastructure lag: Transport links, schools, and hospitals often trail behind the population boom, affecting lifestyle and desirability.
• Commuter fatigue: Long travel times to the CBD or major employment hubs can impact both owner-occupiers and tenant appeal.

Investors hoping for long-term growth may find these areas slow to appreciate, particularly as new supply continues to hit the market.

1. Melton South.
   
2. Werribee South.
3. Wyndhamvale. 
4. Wallan. 
5. Craigieburn. 
6. Officer. 

High Destiny Developments Inn CBD or Docklands. 

Inner-city living has its perks, but certain high-density areas—especially parts of the CBD, Docklands, and Southbank—present red flags for savvy buyers:

• Investor saturation: A large number of investor-owned apartments means fluctuations in rental demand and potential price stagnation.
  • Body corporate fees: These can be prohibitively high, especially in buildings with pools, gyms, and concierge services.
• Limited capital growth: Small apartments in high-rise towers generally have minimal land value and limited uniqueness, which hinders capital appreciation.

Buyers seeking solid, long-term returns should prioritize properties with land component and scarcity—two things most inner-city apartments lack. More information on advice on buying an apartment.

Areas with Socioeconomic Challenges (e.g., Broadmeadows, Dandenong North)

Some suburbs around Melbourne have historically struggled with crime rates, unemployment, and public perception issues. Although they may offer affordability, they come with potential downsides:

• Tenant quality and turnover: Investors may face higher property management demands and maintenance costs due to less stable tenant bases.
• Slower gentrification: While some of these suburbs have shown improvement, others lag behind in terms of infrastructure, amenities, and desirability.
• Stigma: Negative reputation can impact both resale value and rental appeal, regardless of how close they may be to the CBD or transport links.

It’s essential to weigh the long-term fundamentals over just the price tag.

Flood-Prone or Poor Soil Areas (e.g., Maribyrnong River, Carrum Downs, and Hoppers Crossing)

Water authorities and councils make flood maps redial available. Example Melbourne Water Flood Map. 

Melbourne’s geography includes pockets prone to flooding or with problematic soil conditions (like reactive clay), which can complicate property ownership:

• Higher insurance premiums: Flood risk or structural concerns can drive up costs significantly.
• Maintenance issues: Cracking foundations and moisture damage can reduce the lifespan and appeal of a home.
• Resale challenges: Once a property gains a reputation for issues, even minor ones, it can affect marketability down the track.

Before buying, always do due diligence on environmental overlays and soil testing results.

Buying a property isn’t just about picking the cheapest suburb or the one with the flashiest brochures.

It’s about understanding the deeper dynamics—supply and demand, infrastructure plans, community trajectory, and resale potential.

As a buyer’s agent, I advocate for a cautious and informed approach.

There are suburbs in and around Melbourne with genuine long-term potential. But steering clear of areas with poor fundamentals is just as important as choosing the right ones.

The goal isn’t just to buy property—it’s to buy the right property.