Buying Your First Home in Melbourne in 2026
It is harder than it was ten years ago, but not impossible. Melbourne’s property market has more options for first home buyers than Sydney, and government incentives in Victoria are among the most generous in Australia.
Government Incentives (Current as of 2026)
First Home Owner Grant (FHOG):
- $10,000 for new homes valued up to $750,000
- Applies to houses, units, and apartments
- Must be a new build or substantially renovated
Stamp Duty Concessions:
- Full exemption for properties up to $600,000
- Concession (sliding scale) for properties $600,001-$750,000
First Home Guarantee Scheme (Federal):
- Buy with as little as 5% deposit
- No Lenders Mortgage Insurance required
- Limited places per year — apply early
Realistic Budget Ranges
With a combined household income of $150,000 and a 10% deposit:
| Budget | What You Get | Where |
|---|---|---|
| $500,000-$550,000 | 2-bed unit | Outer west, outer north |
| $550,000-$650,000 | 2-bed unit or small townhouse | South-east, outer east |
| $650,000-$750,000 | Townhouse or older house | Middle suburbs, western corridor |
| $750,000-$900,000 | House on land | Growth corridors, select middle suburbs |
Affordable Suburbs for First Buyers
Under $600K (units and townhouses):
- Werribee, Tarneit, Wyndham Vale — west growth corridor
- Cranbourne, Pakenham — south-east growth corridor
- Lalor, Thomastown, Reservoir — north
$600K-$750K (houses and premium units):
- Sunshine, Sunshine West — undervalued inner-west
- Preston, Coburg — inner-north value
- Clayton, Oakleigh — south-east with good transport
- Footscray — gentrifying fast, buy before median moves again
The Process in 7 Steps
- Get pre-approved — know your borrowing power before you start looking
- Calculate true costs — stamp duty, legal fees, building inspection ($2,000-$5,000 total)
- Research suburbs — balance commute, lifestyle, and price
- Inspect at least 10 properties before making any offer
- Get a building inspection — never skip this, even for units
- Make your offer or bid at auction — auctions are common in Melbourne
- Settlement — typically 30-90 days after contract signing
Common Mistakes
- Buying at the top of your budget with no buffer
- Skipping building inspections
- Not factoring in strata fees for units
- Choosing location based only on price without checking transport links
Compare suburbs side-by-side with our Suburb Comparison Tool.