Victorian suburbs tipped as 2026’s investment hotspots
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From Melbourne’s northern suburbs to the picturesque coastal enclaves, Victoria’s real estate market is poised for a dynamic year, with investors eyeing several key areas as potential hotspots. Experts from the property industry have highlighted Melbourne’s coastal regions, Geelong, and Ballarat as the premier Victorian investment destinations for 2026.
The list of promising suburbs includes Elsternwick, Williamstown, Dromana, and Mornington, as well as Lalor, Reservoir, Brunswick West, and Oakleigh. These areas boast median house prices ranging from $750,000 to $1.325 million, making them attractive options for investors seeking value and growth potential.
Following a year of modest residential price growth across much of Melbourne in 2025, real estate agents in areas such as Williamstown and Reservoir have reported a surge in demand from interstate investors. This influx has driven home prices up by tens of thousands of dollars, creating a competitive market environment.
Terry Ryder, founder and managing director of real estate analysis and research website Hotspotting, expressed confidence in the investment potential of several regions. “Ballarat, for example, has had a couple years where prices have been flat and in some cases prices have fallen, so the value for money buying in Ballarat is particularly good at the moment,” Ryder stated. His forecast includes not only Ballarat but also Darwin, regional Tasmania, and Melbourne as key investment areas for 2026.
According to data from PropTrack, the median house price in Greater Melbourne stands at $1.015 million, while regional Victoria’s median is $613,000. Geelong and Ballarat have median house prices of $836,250 and $592,000, respectively. 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.
Cate Bakos, chair of Property Investment Professionals of Australia and a buyers’ advocate, noted that Melbourne and much of Victoria have been in recovery mode after a downturn in recent years. “There’s been a lot of recent demand from investors for Victoria and it’s a value proposition,” Bakos said. However, she cautioned investors to be discerning in their choices, emphasizing the importance of selecting well-located, classic apartments and villa units with good owners corporations and strata teams.
Bakos identified several investor hotspots for 2026, including Elsternwick, Oakleigh, Lilydale, Lalor, Williamstown, Brunswick West, Mt Waverley, Ballarat East, and Greater Geelong’s Herne Hill and Grovedale. “But you do need to be picky. A lot of people are looking for a lower-priced house in some of the areas for lower socio-economic demographics — and they will have challenges,” she advised.
Advantage Property Consulting director and buyers’ advocate Frank Valentic echoed the sentiment of growth potential in Melbourne, pointing out that certain areas and property types would outperform others. “Skyrocketing building costs since Covid will mean renovated houses remain popular along with older and period-style homes which have timeless appeal,” Valentic said. He added that townhouses or units/apartments with land content would be stronger performers than high-rise apartments with just airspace and no land.
Valentic’s top investment picks for 2026 include Elwood, Reservoir, Dromana, Mornington, and Daylesford.
Ian Dempsey, director of Ray White Preston, highlighted the impact of interstate investors on local markets, particularly in Reservoir. “I think that’s really good value compared to other states as Reservoir is only 13-14kms from the CBD,” Dempsey remarked, noting that houses in the suburb are especially sought-after by investors.
Meanwhile, Adrian Butera, vice president of the Real Estate Institute of Victoria and director of Compton Green Inner West, pointed to infrastructure developments as key drivers of investment interest. “Apart from Williamstown’s beach and other amenities, the recently-opened West Gate Tunnel toll road and access from local train stations to the new Melbourne Metro Tunnel will attract even more investors,” Butera explained.
As Victoria’s real estate market gears up for a promising year, investors are advised to conduct thorough research and consider expert insights when making investment decisions. With a diverse range of suburbs offering unique opportunities, 2026 could prove to be a pivotal year for property investment in the state.