Buying your first property in Melbourne’s inner suburbs can feel overwhelming, especially with changing interest rates and tight housing supply.
However, suburbs such as Richmond, Collingwood, Carlton, Hawthorn and Northcote are becoming increasingly attractive for first-home buyers in 2025 and 2026.
Price growth in parts of inner Melbourne has been slower than other Australian capitals in recent years, creating a window of opportunity for buyers who want to secure a home loan and enter the market before demand increases again.
This guide explains:
- Why Richmond and Melbourne’s inner suburbs are popular with first-home buyers
- Current market conditions in inner Melbourne
- What lenders look for when approving a home loan
- Government incentives available to Victorian first-home buyers
Why First-Home Buyers Are Choosing Richmond and Melbourne’s Inner Suburbs
Inner Melbourne: A lifestyle worth investing in
Younger buyers love inner Melbourne because it’s all about the ‘scene’. Suburbs like Brunswick, Footscray, Collingwood, and Northcote offer a mix of walkability, diverse food scenes, access to green spaces and proximity to the CBD, as well as a range of nightlife, cafes, restaurants and shopping options.
Choosing a compact apartment or townhouse in an inner suburb often wins over a larger home in an outer area because it means shorter commutes, better public transport options (inner Melbourne suburbs have great access to the city’s tram network), and more time to enjoy local amenities.
Is Now a Good Time to Buy Property in Inner Melbourne?
Market shifts are creating opportunities
Melbourne’s growth has lagged behind other capitals in recent years. In 2024 and 2025, prices stabilised in areas like Brunswick, and there were even small dips that levelled out a sharp rise that happened towards the end of the pandemic.
The thing about a price dip in Australia is that it never lasts for long. Experts are expecting Melbourne to lead the charge in house prices over the next 12-24 months as interest rates fall and demand increases.
While it’s not possible to say for sure what will happen, if you buy within the next few months, history tells us it’s more than likely you will experience positive gains.
What Lenders Look for When Approving a Home Loan in Melbourne
1. Your borrowing capacity
Banks look at:
- income
- living expenses
- credit card limits
- existing debts
- number of dependants
This determines how much you can borrow for a home loan.
2. Savings and deposit
Most lenders require a minimum deposit of 5–20% of the property value.
A larger deposit can:
- reduce monthly repayments
- improve loan approval chances
- avoid lender’s mortgage insurance (LMI)
3. Employment and income stability
Lenders generally prefer applicants who have:
- stable full-time employment, or
- consistent self-employment income.
Providing clear financial documentation speeds up the loan pre-approval process.
Government Incentives for First-Home Buyers in Victoria
Don’t forget about government support for home loans in Melbourne. First-home buyers may be eligible for grants or stamp duty concessions in Victoria, depending on the value of the property, and you may also be able to buy with a deposit as low as 5 per cent, without the need to pay lender’s mortgage insurance.
A local mortgage broker from Lend & Co can help you take advantage of these incentives and move quickly so you can secure a home in inner Melbourne sooner rather than later.
Position yourself for success
If you’re a first-home buyer weighing your options in 2025, don’t overlook Melbourne’s inner suburbs. These areas offer the cultural energy, convenience and investment potential that many outer areas can’t match, especially when combined with the right financial strategy. For a broader overview of the buying process, you can also refer to the Victorian Government’s First Home Buyer Guide.
Whether you’re eyeing a character-filled apartment in Carlton or a modern townhouse in Richmond, the key is to be prepared. Get your budget in order, then speak with a broker from Lend & Co, and you’ll be ready to move when opportunity knocks.
Get Pre-Approved for a Home Loan in Richmond or Inner Melbourne
If you’re planning to buy property in Richmond, Carlton, Collingwood or Melbourne’s inner eastern suburbs, securing home loan pre-approval is one of the first steps.
Apply for home loan pre-approval with Lend & Co to act fast in a competitive market. Our brokers understand the local property landscape and will match you with the right loan to suit your goals and budget. Start your journey toward inner-city home ownership with expert guidance and fast finance solutions.
Contact Lend & Co or book a free strategy call to explore your options for home loans in Melbourne and start your journey toward smart inner-city home ownership.
