Frankston is currently the strongest performer in the South East, recording 14.3% annual growth and a median price of $856,746 (Cotality, January 2026). Other leading regions include Kingston (+8.8%), Whitehorse East (+8.6%), Dandenong (+8.5%), and Knox (+7.6%) (Cotality, January 2026).
Price growth in the South East is being driven by a combination of affordability and active gentrification. While Melbourne has historically maintained a wide discount compared to Sydney, the recovery is now concentrated in specific outer-suburban and gentrifying pockets.
Which regions are seeing the most growth?
Frankston has held the top growth position for six consecutive months, with annual growth of 14.3% (Cotality, January 2026). Kingston and Whitehorse East are also showing sustained price growth, with growth rates of 8.8% and 8.6% respectively (Cotality, January 2026).
The impact of gentrification
Frankston and Cheltenham are showing clear gentrification signals, characterised by a demographic shift toward younger professionals and heritage home renovations with architect-designed extensions (RAG context). These areas are experiencing price appreciation of 8–15% over a two to three year period (RAG context).
Performance of affordable properties
Properties under $800,000 are seeing mixed results, though house prices in outer suburbs are increasing as investors and first-home buyers enter the market (RAG context). Dandenong is a primary example of this trend, with a median price of $794,550 and annual growth of 8.5% (Cotality, January 2026).
The interest rate uncertainty
Rate hikes in February and March 2026 have introduced new uncertainty into the market. This creates a gap between vendor expectations based on 2025’s strong recovery and the current borrowing capacity of buyers.
| Region | Median Price | Annual Growth |
|---|---|---|
| Frankston | $856,746 | +14.3% |
| Kingston | $1,085,527 | +8.8% |
| Whitehorse East | $1,239,067 | +8.6% |
| Dandenong | $794,550 | +8.5% |
| Knox | $965,300 | +7.6% |
Frequently asked questions
Is now a good time to sell in the South East?
Melbourne house prices increased approximately 11–14% over 2025, providing a strong baseline for vendors (RAG context). However, rate hikes in February and March 2026 have introduced new uncertainty. The decision to sell depends on whether your property sits in a high-growth gentrification pocket or a slower segment.
Why is Frankston growing faster than other South East suburbs?
Frankston is benefiting from clear gentrification signals, including specialty retail replacing older shops and a shift toward younger professional residents (RAG context). This trend, combined with its affordability, has helped it maintain the top growth position for six consecutive months at 14.3% (Cotality, January 2026).
How does Melbourne’s price growth compare to other capital cities?
The median house price gap between Melbourne and Sydney exceeds $600,000 (RAG context). While Perth, Brisbane, and Adelaide are expected to slow their growth sharply from 2026–2027, Melbourne is recovering from a deeper correction seen between 2022 and 2023 (RAG context).
What is happening with properties priced under $800,000?
Results are mixed for the affordable segment. Some outer suburbs faced price declines due to oversupply, but others are increasing as first-home buyers use incentives (RAG context). There is also increasing price growth for villa units in inner suburbs and entry-level houses in the outer ring (RAG context).
Questions to ask your agent
- How do my property’s specific features compare to the architect-designed extensions currently driving 8–15% growth in gentrifying areas?
- What is the current buyer profile for my suburb—are we seeing the shift toward younger professionals noted in the latest data?
- Given the February and March rate hikes, how has the volume of qualified buyers for my specific price bracket changed?
This article contains general market information based on data current as at April 2026. It does not constitute financial, legal, or real estate advice specific to your property or circumstances. For an appraisal and tailored advice, speak with a Fletchers agent in your area.