The 10 Melbourne Suburbs to Avoid Buying Property In (2025 Edition)

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When you're looking to buy a property in Melbourne, it's tempting to focus on the glossier suburbs or those with the cheapest price tag. But the wrong choice can cost you dearly in the long run — not just in money, but also in time, stress, resale value, and livability. As conveyancers who deal daily with the back-end reality of property transactions, we see beyond the real estate brochure photos.

This article takes a grounded, data-backed look at the ten suburbs across Melbourne that buyers may want to avoid in 2025, whether due to underwhelming capital growth, oversupply, crime rates, owner dissatisfaction, or systemic infrastructure problems.

We are not in the business of scaring buyers, but of arming you with facts so you can make better decisions. This is not a "doom and gloom" list. Rather, it is an honest guide to help buyers approach certain areas with caution and professional oversight.

Criteria for Inclusion

We have selected the suburbs in this list based on a combination of:

  • Historical and current capital growth data

  • Rental vacancy rates and investor returns

  • Crime statistics and public safety concerns

  • Volume of buyer complaints and post-sale disputes

  • Planning and zoning complications

  • Community sentiment, liveability, and social issues

  • Industry alerts, including Hotspotting and CoreLogic data

This isn’t based on personal opinion or prejudice against specific neighbourhoods. Every suburb can change over time. We assess them based on what 2025 is showing us.

1. Cranbourne East (Outer South-East)

Why it's on the list:

  • Hotspotting has officially flagged Cranbourne East as a no-go area for property investors in 2025.

  • New land releases are oversaturating the market, putting downward pressure on both resale and rental returns.

  • Buyers are being drawn in by low entry prices, but many are discovering difficulty in reselling.

  • Infrastructure is lagging behind the pace of development.

Risk profile:

  • Long-term value stagnation

  • Delayed planning approvals and poor council servicing

  • Increasing rental vacancies

Our experience: We often see contracts in this suburb with poorly defined special conditions and high developer control over lot resales.

2. Abbotsford (Inner North-East)

Why it's on the list:

  • Listed by multiple sources as a declining performer in terms of capital growth.

  • High density living, overdevelopment and apartment oversupply.

  • Ongoing concerns around housing commission boundaries, localised crime, and noise issues from industrial or nightlife zones.

Risk profile:

  • Stagnant or negative growth, particularly for units

  • Unclear property boundaries and building compliance issues

What buyers should check: Always review the OC certificate in full and check whether short-stay (Airbnb-style) leasing is being conducted in the building. It can materially impact future resale.

3. Docklands (Inner West)

Why it's on the list:

  • The poster child for post-COVID urban desolation. While new buildings are rising, occupancy is not.

  • Prices have dropped significantly in the last five years, with little sign of investor confidence returning.

  • Oversupply is chronic. Infrastructure exists, but community does not.

Risk profile:

  • Long periods on market, even for well-priced properties

  • Many buildings are under cladding or fire safety review

We note: This is a suburb we routinely caution against when reviewing apartment contracts. Many strata schemes are large, opaque, and poorly managed.

4. Dandenong (South-East Corridor)

Why it's on the list:

  • Crime remains persistently high compared to neighbouring areas.

  • Buyer feedback frequently raises concern over property maintenance, tenant turnover, and safety.

  • Aging housing stock combined with sporadic and uneven gentrification efforts.

Risk profile:

  • Limited family buyer interest

  • Difficulty securing competitive insurance premiums

Important: Check planning overlays carefully. We've seen clients caught off guard by flood overlays, EPA buffer zones, and special zoning conditions around industry.

5. Frankston North (Bayside Fringe)

Why it's on the list:

  • Unlike its better-known southern neighbour (Frankston South), Frankston North suffers from low owner-occupier ratios and high levels of social disadvantage.

  • Long-term capital growth is weak, and lending valuations are often conservative.

Risk profile:

  • Lower resale appeal

  • High rate of mortgagee-in-possession listings

Our local knowledge: We know Frankston very well, and Frankston North holds a soft spot for us – it was where we bought our first home. The suburb has great amenities and an excellent location, but has unfortunately suffered from poor capital growth. Some parts are starting to improve, but many remain burdened by outdated crime perceptions and investor fatigue.

6. West Melbourne (Inner Urban)

Why it's on the list:

  • Despite proximity to the CBD, capital growth has flatlined.

  • An identity crisis: neither a well-connected residential hub nor an established commercial district.

  • Reports of poor value-for-money in many apartment builds.

Risk profile:

  • High owner discontent, especially in mid-rise developments

  • Expensive OC fees with limited amenity

Tip: Never rely on first impressions. West Melbourne is a good example of where a deep dive into the OC rules and financials often reveals trouble.

7. Murrumbeena (Units)

Why it's on the list:

  • Houses have held up better, but the unit market here has stalled.

  • Overconstruction of near-identical apartment blocks.

  • Low rental returns and high competition in the sub-$500/week segment.

Risk profile:

  • Subdued investor demand

  • High OC turnover and defect litigation risk

Advice: If considering units, obtain a full building defect report and OC minutes. Do not rely on a Section 32 that includes only the last annual statement.

8. Essendon North (North-West)

Why it's on the list:

  • Recorded one of the lowest capital growth rates in Melbourne in 2024 (under 1%).

  • Properties sit unsold despite relatively high advertised prices.

  • Lacks the charm and street appeal of Essendon proper.

Risk profile:

  • Value distortion – people expect Essendon, get North Essendon instead

  • Limited future buyer demand

Contract tip: There are often flight path disclosures required for this suburb – particularly near the Essendon Fields Airport precinct. Always check planning overlays.

9. South Yarra (Apartments)

Why it's on the list:

  • While houses and boutique townhouses can hold strong, the bulk of units are struggling.

  • Investor yields are unremarkable and OC disputes are common.

  • Oversupply is the real problem here. Everyone wants to sell, but few want to buy a second-hand tower unit.

Risk profile:

  • Cramped amenities

  • Ghost towers (lots of unoccupied stock)

What we recommend: Buyers considering South Yarra apartments should avoid anything above level 5 in a building with more than 40 units. The resale pool dries up fast.

10. Maribyrnong (Western Corridor)

Why it's on the list:

  • Low rental yield and weak capital growth data

  • Westfield has long been the centrepiece, but beyond that, amenity is patchy

  • Flood risk in parts remains a red flag

Risk profile:

  • Climate resilience issues (check the Maribyrnong River overlays)

  • Fragmented market with no consistent price floor

Common mistake: Buyers assume all inner-west suburbs are on the rise. But not all have the gentrification infrastructure to back it up.

Honorable Mentions:

These suburbs just missed the top 10 but deserve careful attention before buying:

  • Heidelberg West: Perceived as undervalued, but remains crime-prone.

  • Craigieburn: Mortgage stress and oversupply worries.

  • Sunshine North: Complicated planning overlays and inconsistent demand.

  • Broadmeadows: Very slow capital growth.

Final Thoughts

It is always important to remember that no suburb is beyond redemption. Markets change. Communities evolve. And often the very worst-performing suburb one decade becomes the hidden gem of the next.

But in 2025, these ten suburbs are showing signs of stress. If you are buying into any of these areas, you should do so with eyes wide open and professional oversight on the contract, title, zoning, and property condition.

We’ve reviewed hundreds of contracts in these locations. We know the traps and fine print that could come back to bite. Our advice is not to avoid these suburbs forever — but to get advice before you buy.

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

David Dawn
Licensed Conveyancer
Victorian Property Settlements
PO Box 11220, Frankston VIC 3199
Email: david@quick32.com
Phone: (03) 9783 0111