As Australia's housing shortage drags on, Melbourne is emerging as a top destination for would-be homeowners.
That's the latest from National Australia Bank (NAB), which found that Melbourne’s outer suburbs are leading the pack as Australia’s most in-demand metro areas for property in 2025.
For homebuyers and brokers alike, the takeaway is clear: looking beyond the city centre and into alternative neighbourhoods could unlock better housing opportunities and greater potential returns.
"Many home buyers are looking further out, not just for value, but because many of these areas are now better connected thanks to major infrastructure investments,” said Denton Pugh, NAB executive for home lending. "Many are also spots where buyers can find the space they’re after without having to compromise on other things that matter such as community spaces like parks and sporting facilities."
NAB’s lending data, which tracks January to May 2025, reveals rising demand in the outer metro rings of capital cities, driven by affordability, infrastructure improvements and strong prospects for future price growth.
Melbourne dominated the rankings, claiming five of the top 10 spots nationwide. Topping the list was Truganina, on the city’s west side, ranked as the most sought-after metro suburb for homebuyers in 2025. Other high-demand areas in Melbourne included Roxburgh Park, Point Cook, Cranbourne East and Tarneit.
Sydney came in second, with four suburbs making the list, including Yarramundi–Londonderry, Schofields, Wentworthville and Prestons. Meanwhile, Perth’s Piara Waters-Forrestdale was the only inclusion from outside the east coast.
The report comes as both homeowners and would-be homeowners continue to grapple with cost-of-living pressures Down Under. Meanwhile, those hoping to jump on the property ladder – or to upgrade – are faced with a continued housing shortage and rising property prices.
In fact, since the pandemic, Australia's property markets have seemingly been operating on two speeds: soaring in some cities, sliding in others. In areas like Perth or Adelaide, property prices have had double digit growth in the last year, while Melbourne and Hobart have had declines. Yet, with housing supply still tight nationwide, the demand for homes remains urgent. And with a noticeable lack of housing, property prices are more likely to continue rising.
"Until we resolve these supply issues, we're going to continue to see capital appreciation in the housing stock," Nick Anderson, founder and managing director of Sonam Capital, told Australian Broker. "People need a place to live."
For now, the answer for many homeowners and investors is to look beyond the city centre, chasing affordability and space in outer suburbs that still stay connected to the urban core.
Complicating matters, many mortgage holders and investors were banking on a rate cut this month. But the Reserve Bank of Australia (RBA) surprised markets by holding the official cash rate (OCR) steady at 3.85%. The widely-unexpected decision dashed hopes for mortgage relief – at least in the short-term – as borrowers continue to face higher repayment pressures. The RBA cited persistent inflation and global economic uncertainty as key reasons for maintaining its current stance.
Pugh added that while mortgage holders in Australia may have been disappointed with the RBA's recent decision, he still said there's signs of growing optimism in the nation's property markets.
"Even with rates still relatively high, buyers feel the peak has passed and want to make their move before prices climb further," the executive said. "Typically, the winter months are quieter, but we're seeing steady demand that should continue through to the busy spring buying season.
"Improving conditions are boosting buyer confidence and increasing borrowing power for many, translating to more home buyers entering the market," Pugh added. "We expect capital city prices to continue their recovery through 2025, with stronger growth likely in 2026."
NAB is anticipating additional interest rate cuts in the back half of 2025, as well as early 2026.
The surge in demand for homes in outer metro suburbs presents both challenges and opportunities for mortgage brokers.
With buyers increasingly targeting areas like Truganina, Roxburgh Park and Point Cook, brokers must be ready to support clients navigating these fast-moving markets. These suburbs often attract first-home buyers and young families who may need extra guidance through the borrowing process, particularly as interest rates remain high.
Brokers should stay across evolving lender policies, infrastructure developments and government incentives that may influence borrowing power or suburb desirability. As confidence returns and competition picks up ahead of the spring selling season, brokers who understand the appeal and complexity of outer metro growth corridors will be best positioned to capitalize.
