10 Melbourne Suburbs First Home Buyers Should Avoid in 2025

Buying your first home in Melbourne is exciting, but it also carries risk. For many, the goal is a place to live and a long-term investment. Unfortunately, not all suburbs offer the security, growth prospects, or lifestyle that first home buyers are hoping for.

As explained by David Dawn, Licensed Conveyancer at Victorian Property Settlements, the first purchase often sets the tone for your financial future. Choosing the wrong suburb can mean higher crime risks, limited capital growth, or daily lifestyle challenges.

Here are 10 suburbs that first home buyers should be cautious about in 2025.

1. Sunshine

Sunshine has long been identified as one of Melbourne’s crime hot spots, with violent crime and property crime rates well above the state average. While the area is undergoing development and enjoys excellent transport links, first home buyers should weigh the risks of safety and reputation when considering this suburb.

2. Melton

Melton’s affordability has drawn many first home buyers, but there are trade-offs. High crime rates and long commute times into Melbourne’s CBD make daily life less convenient. Infrastructure in the area has not kept pace with rapid growth, leaving gaps in transport, services, and amenities.

3. Sunbury

Sunbury is a unique case. Houses can be good value, but the unit market is risky. Units are often priced close to the cost of a house in other growth suburbs, leaving little room for capital growth. For first home buyers, this can be a financial trap.

4. Tarneit

Tarneit shares many of Sunbury’s challenges. While there’s population growth, the infrastructure often lags behind. Public transport is crowded, and the lifestyle trade-offs are significant. Like Sunbury, buying a unit here can leave first home buyers overexposed with limited upside.

5. Heidelberg Heights

Heidelberg Heights is a sought-after location, but first home buyers should be cautious. Units in the suburb are priced very close to houses, which reduces long-term value prospects. For those looking at strata properties, owners corporation fees can also eat into budgets.

6. Dandenong

Dandenong offers cultural diversity and excellent transport links, but parts of the suburb are affected by high crime rates and socio-economic disadvantage. For first home buyers hoping for steady growth, these factors can hold the market back.

7. Frankston North

Frankston has areas with excellent growth, but Frankston North is often singled out as struggling with weaker buyer demand. First home buyers should be mindful that infrastructure and amenity improvements have been slow to arrive in this pocket of Melbourne.

8. Narre Warren South

Narre Warren South has seen a drop in property sales, raising concerns about stagnation. While outer-suburban living can be appealing for families, first home buyers need to consider the longer commute times and whether local services will keep pace with demand.

9. Southbank and Carlton

Both of these inner-city areas attract students and investors, but they carry risks for first home buyers. Crime rates, particularly theft and assaults, are higher than average. Apartment oversupply is also an issue, leaving little room for capital growth and raising the risk of high owners corporation fees.

10. St Kilda

St Kilda’s charm is undeniable, but rising crime rates are a concern. The unit market is high-density, with limited land value to underpin prices. First home buyers should think carefully before committing to a purchase here, especially if their long-term goal is stability and growth.

The Takeaway

This list is not about writing off entire suburbs forever. Many of these areas have strong communities and potential for change. However, in 2025, first home buyers should tread carefully.

Your first property is not just a home — it’s a foundation for your financial future. By avoiding suburbs where risks are high and growth potential is limited, you give yourself a stronger start.

If you’re considering a purchase in Melbourne, make sure you have your contract professionally reviewed before committing. Advice from a licensed conveyancer can help highlight risks that may not be obvious from a quick inspection.

Victorian Property Settlements – Trusted for over 25 years by Victorian buyers and sellers. Visit: www.victorianpropertysettlements.com.au