Median prices in the South East corridor have seen sustained growth, led by Frankston with 14.3% annual growth and a median of $856,746 (Cotality, January 2026). Other key regions including Kingston, Dandenong, and Knox have reported annual growth ranging from 7.6% to 8.8% (Cotality, January 2026).
Buyers are currently balancing the momentum of a strong 2025 recovery against new uncertainty caused by rate hikes in February and March 2026. While the South East remains a primary target for affordability-driven buyers, the shift in borrowing capacity is changing how vendors and buyers negotiate.
Current median price growth
Frankston has held the top growth position for six consecutive months, reaching a median of $856,746 (Cotality, January 2026). Kingston and Knox follow with medians of $1,085,527 and $965,300 respectively (Cotality, January 2026). These figures reflect a broader recovery where affordability-driven suburbs in the south-east led the way following the 2024 trough.
Gentrification signals in the South East
Frankston and Cheltenham are showing clear gentrification signals, characterized by specialty retail replacing older shops and heritage home renovations with architect-designed extensions. These areas are seeing price appreciation of 8–15% over a 2–3 year window as the demographic shifts toward younger professionals.
The affordable house segment
Outer South East areas like Dandenong, with a median of $794,550, continue to attract investors and first-home buyers (Cotality, January 2026). House prices in these outer suburbs are increasing as buyers seek entry-level properties under $800,000, contrasting with the mixed results seen in the apartment sector.
The rate hike uncertainty
Rate hikes in February and March 2026 have introduced a new layer of complexity to valuations. Buyers who were aggressive during the 11–14% growth period of 2025 are now more cautious, leading to a visible increase in the time taken to reach a final agreement on price.
| Region | Median Price (Jan 2026) | Annual Growth |
|---|---|---|
| Frankston | $856,746 | +14.3% |
| Kingston | $1,085,527 | +8.8% |
| Dandenong | $794,550 | +8.5% |
| Knox | $965,300 | +7.6% |
Frequently asked questions
How does Melbourne’s pricing compare to other capital cities?
The median house price gap between Melbourne and Sydney now exceeds $600,000, which is a historically wide discount. Melbourne’s median has recently dipped below Perth’s and sits only marginally above Adelaide’s, an unusual position for Australia’s second-largest city.
Which South East suburbs are showing gentrification?
Frankston and Cheltenham are the primary South East areas showing gentrification. This is evidenced by warehouse conversions, architect-designed extensions to heritage homes, and a demographic shift toward younger professionals, resulting in price appreciation of 8–15% over 2–3 years.
What was the price trend in Melbourne during 2025?
Melbourne recovered strongly throughout 2025. Median house prices increased by approximately 11–14% over the year, following a trough in 2024 and a previous correction of 8–10% between 2022 and 2023 driven by RBA rate rises and Victoria’s land tax measures.
Are houses under $800,000 still increasing in value?
Yes, house prices in outer suburbs within the affordable segment are increasing. This growth is being driven by first-home buyers and investors entering the market, though this differs from the apartment market which has seen more mixed results due to oversupply.
Questions to ask your agent
- Based on the gentrification trends in Frankston and Cheltenham, how does my property’s specific architectural style align with current buyer preferences?
- How have the February and March 2026 rate hikes specifically affected buyer enquiry levels in my immediate street or pocket?
- Given the current discount between Melbourne and other capitals, are you seeing increased interest from interstate investors in the South East corridor?
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.