Victorian suburbs tipped as investment hotspots of 2026 – realestate.com.au

The coastal enclaves of Melbourne, Geelong and Ballarat have been tipped as key Victorian investment hotspots for 2026.

In addition to Elsternwick Beach, Williamstown, Dromana and Mornington, property industry experts have highlighted areas such as Lalor, Reservoir, Brunswick West and Oakleigh – where average house prices range from $750,000 to $1,325 million – as the cream of the crop for investment over the next twelve months.

Following modest house price growth across much of Melbourne through 2025, agents in areas such as Williamstown and Reservoir are reporting that unprecedented demand from interstate investors looking for a bargain has pushed up house prices by tens of thousands of dollars.

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Property analysis and research website Hotspotting’s founder and director Terry Ryder said he expected investors to be attracted to the likes of Darwin, regional Tasmania, Melbourne, Ballarat and Geelong by 2026.

“For example, Ballarat has had a few years where prices have been flat and in some cases prices have fallen, so the value for money when buying from Ballarat is particularly good at the moment,” Mr Ryder said.

According to PropTrack, Greater Melbourne’s average house price is $1,015 million, regional Victoria $613,000, Geelong $836,250 and Ballarat $592,000.

Typical unit values, including apartments, are $626,000 in Greater Melbourne, $434,000 in regional Victoria, $620,000 in Geelong and $407,500 in Ballarat.

This three-bedroom Geelong home sold in August 2025 for $771,000. The median home price in the area is $836,250, PropTrack data shows.

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Hotspotting director Terry Ryder says Darwin, regional Tasmania, Melbourne, Ballarat and Geelong will be hotspots for investors by 2026.

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Cate Bakos, chair of Property Investment Professionals of Australia and buyer advocate, said Melbourne and much of Victoria have been recovering for several months after a recession in recent years, but have shown only limited growth so far.

But with other parts of the country rising substantially in recent years, the state and city were starting to look like they were in prospect of a broad-based increase by 2026.

“There has been a lot of investor demand for Victoria recently and it is a value proposition,” Ms Bakos said.

Cate Bakos, chair of Property Investment Professionals of Australia and buyer advocate, nominated Lalor, in Melbourne’s north, as one of her investor hotspots for the year.

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Experts say it’s important for investors to do their research before choosing a property to buy.

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“But you have to be picky. Many people are looking for a cheaper home in some areas with lower socio-economic demographics – and they will face challenges.”

Ms Bakos noted that following the crowds in these areas could be “a danger” and said not all homes under $700,000 on the outskirts of Melbourne were good investments.

She recommended instead sticking to well-located, classic apartments and villas – especially those with good owner companies and strata teams.

Ms Bakos’ investor hotspot nominations for 2026 include Elsternwick, Oakleigh, Lilydale, Lalor, Williamstown, Brunswick West, Mt Waverley, Ballarat East and Herne Hill and Grovedale in Greater Geelong.

This Williamstown home fetched $1.46 million as of November 2025. The western Melbourne suburb has a median house value of $1.55 million.

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Advantage Property Consulting director and buyer advocate Frank Valentic said while he expected broad-based growth in Melbourne this year, certain areas and property types would be top performers, with houses being clear winners over units and apartments.

Skyrocketing construction costs since Covid will ensure that renovated homes remain popular, along with older, period-style homes that have a timeless appeal.

“And townhouses or units/apartments with land content will outperform high-rise apartments with only airspace and no land,” Mr Valentic added.

Mr Valentic’s top investment picks for 2026 are Elwood, Reservoir, Dromana, Mornington and Daylesford.

A house in Herne Hill that changed hands for $750,000 in May 2025. Herne Hill is a suburb of Geelong, with an average house price of $755,000.

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Ray White Preston director Ian Dempsey said an influx of interstate investors competing with local buyers was driving up the prices of some reservoirs by tens of thousands of dollars.

In the suburb, houses with an asking price of between $800,000 and $1.2 million are particularly popular with investors.

“I think this is a really good price compared to other states as the reservoir is only 13-14km from the CBD,” Mr Dempsey said.

“If you compare that to Sydney, you’re paying at least a million dollars extra.”

This four-bedroom Elwood home sold in May 2025 for $2.3 million. The bayside suburb is located 8km south-east of Melbourne’s CBD.

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Adrian Butera, vice-president of the Real Estate Institute of Victoria and director of Compton Green Inner West, said apart from Williamstown beach and other amenities, the recently opened West Gate Tunnel toll road and access from local train stations to Melbourne’s new Metro tunnel would attract even more investors.

“I think real estate investing will follow as people realize that convenience, and then they’ll identify properties at the end of the line, so to speak,” Butera said.

Williamstown and Williamstown Beach stations are the terminus of their line.

Additional reporting by Nathan Mawby and Courtney Snowden

2026 VIC INVESTOR SHOTSPOTS: THE EXPERT’S CHOICES

Cate Bakos, chair of Property Investment Professionals of Australia and buyer advocate:

Cate Bakos, chair of Property Investment Professionals of Australia and buyer advocate, is based in Melbourne.

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Ballarat East

Median home price: $505,000

Soldiers Hill is Ballarat’s popular darling, but Ballarat East is home to some of the oldest architecture. Owners are benefiting from Ballarat’s share gains and some of the renovations and developments are impressive. Located on the Melbourne side of the city, and with Ballarat station just a short drive or bus ride away, Ballarat East offers plenty for the budget.

Lalor

Median home price: $750,000

Lalor and Thomastown have seen incredible growth over the past year, but there is more in store for this wallet. Lalor is conveniently located near Western Ring Rd and offers train station amenities along High St. It is one of the last options in an established area where a three-bedroom brick veneer house on 500 square meters within 18km of Melbourne’s CBD is still available for $800,000 or less.

This three-bedroom Ballarat East home fetched $576,000 when it sold in September 2025.

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Herne Hill

Median home price: $755,000

Herne Hill is still a sleepy suburb compared to bustling Geelong West and has some beautiful character homes on offer. My favorite attribute, apart from the beautiful homes on offer, is the rail trail walk, an old, disused railway line that is now a quiet path between parks.

Oakleigh

Median home price: $1,325 million

In the leafy south-eastern suburbs it represents fantastic value, especially with the new Oakleigh train station, Eaton Mall, restaurants and many historic and character homes for families and couples.

Williamstown

Median home price: $1.55 million

Williamstown has always been known as the jewel in Melbourne’s west, but its affordability compared to the eastern beachside suburbs is astonishing. Now that work on the West Gate Tunnel and highway improvements has been completed, inland travel times have also been reduced.

Advantage Property Consulting director and buyer advocate Frank Valentic:

Advantage Property Consulting director and buyer advocate Frank Valentic has purchased several properties on behalf of clients on the television program The Block.

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Daylesford

Median home price: $810,000

The Block Factor has marketed Daylesford to a new Australian and global audience who were unfamiliar with the city before its appearance in the 2025 reality show season. The area has experienced solid growth and has seen an average annual growth rate of 10 percent over the past five years, making it a strong performer compared to many areas in Melbourne.

Reservoir

Median home price: $911,000

It is a popular suburb with families and first home buyers, just 13km north of Melbourne’s CBD. The ripple effect is pushing many buyers away from Preston, which is 9km from the CBD and has a typical house value of $1.126 million.

In October 2025, this Daylesford home changed hands for $785,000.

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Dromana

Median home price: $920,000

This Mornington Peninsula suburb is much more affordable than neighboring areas such as Portsea. It attracts both permanent and holiday home residents and many homes have water views due to the hilly landscape.

Mornington

Median home price: $1.05 million

Mornington is located 70 km south-east of Melbourne and attracts professionals, retirees and young families.

In August 2025, this two-bedroom Reservoir home scored a sale of $880,000.

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Elwood

Median home price: $2,245 million

Elwood will remain popular with families, professionals and downsizers. Elwood has averaged just 3.2 per cent annual growth over the past five years and buying there is much better now than in the Covid period, when typical home values ​​were more than $3 million.

Source: Median home prices from PropTrack

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