No, outer suburbs are currently outperforming middle ring eastern suburbs in percentage growth. Frankston led the market with 14.3% annual growth (Cotality, January 2026), while eastern regions such as Whitehorse East and Knox saw lower growth rates of 8.6% and 7.6% respectively (Cotality, January 2026).
The market is currently operating on a two-speed dynamic where affordability is the primary driver of growth. Investors and first-home buyers are increasingly moving into outer corridors ahead of expected first-home buyer grant activity, shifting momentum away from the middle ring.
Growth in the outer suburbs
Outer-suburban properties are outperforming the city median as entry-level buyers seek affordability. Frankston has held the top growth position for six consecutive months with a 14.3% annual increase (Cotality, January 2026). We see this at open for inspections, where buyer volume is concentrated in the house segment under $800,000.
Middle ring eastern suburb performance
The eastern middle ring remains stable but is seeing slower growth than the outer fringes. Whitehorse East recorded 8.6% annual growth with a median of $1,239,067, while Knox saw 7.6% growth with a median of $965,300 (Cotality, January 2026). Vendors in these areas are seeing steady interest, but without the aggressive competition found in cheaper corridors.
The impact of affordability and grants
House prices in outer suburbs are increasing as buyers move to secure properties before anticipated first-home buyer grant activity (Context). This trend is creating a divergence between the middle ring and outer areas. Buyers are increasingly bypassing high-density inner-city apartments in favor of landed assets in these outer regions.
The grant timing risk
The current growth in outer suburbs is heavily tied to expectations around future first-home buyer grants. If the timing or scale of these grants deviates from buyer expectations, the current momentum in these affordable pockets could shift. This creates an appraisal spread where current prices reflect future anticipation rather than current equity.
| 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
Why are outer suburbs growing faster than middle ring eastern suburbs?
Growth is being driven by affordability and the movement of first-home buyers and investors into outer corridors (Context). These buyers are acting ahead of expected first-home buyer grant activity, increasing demand for properties under $800,000, while middle ring suburbs face higher entry price points that limit the buyer pool.
Is it a good time to invest in outer Melbourne houses?
Outer suburbs are currently outperforming the city median, with regions like Frankston seeing 14.3% growth (Cotality, January 2026). However, results are mixed in the affordable segment; some areas face oversupply and reduced investor activity, while others benefit from infrastructure and first-home buyer incentives (Context).
How is the eastern suburb market performing overall?
Eastern suburbs are experiencing steady growth but trailing the outer rings. Whitehorse East and Knox have seen annual growth of 8.6% and 7.6% respectively (Cotality, January 2026). These areas represent a more stable, higher-median segment compared to the more volatile, high-growth outer suburban corridors.
What is happening with Melbourne apartment prices?
Inner-city high-density apartments have experienced softer conditions compared to houses (Context). However, apartment prices in Melbourne have been increasing more recently, and there is a notable trend of villa units in inner suburbs seeing increased demand as buyers seek a balance of location and land.
Questions to ask your agent
- What percentage of the current buyer pool in this suburb are first-home buyers versus investors?
- How does the growth in this specific pocket compare to the wider outer-suburban trend of 14.3% seen in Frankston?
- Which specific local infrastructure completions are currently influencing buyer demand in this street?
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.