15 May 2026 Buying a Unit vs House in South East Melbourne: The 2026 Guide
In 2026, South East Melbourne offers compelling options for both unit and house buyers who understand the key differences. Whether you’re a first home buyer working with a smaller deposit, an investor targeting rental yield, or an upgrader looking for capital growth, choosing between a unit and house affects your loan structure, stamp duty, and long-term outcome.
The unit market in inner South East Melbourne suburbs like St Kilda – Windsor and South Yarra sits below key government thresholds, opening up advantages that house purchases don’t access. Meanwhile, houses across the broader catchment offer stronger growth potential and greater lending flexibility.
EverLend helps South East Melbourne buyers compare their unit and house options across 60+ lenders, completely free of charge.
Here’s what you need to know before choosing your property type in 2026.
Key takeaways
- Units in St Kilda, Windsor and South Yarra sit under the $600,000 stamp duty exemption threshold.
- The First Home Guarantee (5% deposit, no LMI) applies to both units and houses up to $950,000.
- Houses across South East Melbourne start from $1.29M, requiring significantly larger deposits.
Why does property type matter for your loan approval?
Your choice between a unit and house affects more than just the purchase price. Lenders assess units and houses differently, apply different loan-to-value ratio limits, and some government schemes have property type restrictions that can save or cost you thousands.
Unit purchases in South East Melbourne often qualify for benefits that house purchases miss, particularly around stamp duty exemptions and first home buyer schemes. The variation between what you can access with each property type is substantial.
Which property type offers better value in South East Melbourne in 2026?
Units offer better entry value for buyers working with smaller deposits, while houses provide stronger capital growth potential over time. Competitive variable rates start from approximately 5.70% p.a. for both property types, but the deposit requirements and government benefits differ significantly. Your best choice depends on your budget, goals, and whether you qualify for first home buyer schemes, which is exactly what we work through with you in a free consultation.
What first home buyer advantages apply by property type?
Government schemes available to South East Melbourne first home buyers:
- ›First Home Guarantee: buy with a 5% deposit, no LMI, up to $950,000 in South East Melbourne – applies to both units and houses under the cap.
- ›Stamp duty exemption: $0 stamp duty on properties up to $600,000 – primarily benefits unit purchases in inner suburbs like St Kilda ($490,000 units) and Windsor ($536,375 units).
- ›Victorian First Home Owner Grant: $10,000 for new homes up to $750,000 – confirmed continuing in the 2026-27 Victorian Budget. Applies to new units and houses, but most South East Melbourne houses exceed this cap.
- ›VIC off-the-plan concession: excludes construction costs from stamp duty assessment – extended to contracts entered into before 21 April 2027 (subject to legislation). Can bring off-the-plan unit purchases under the $600,000 exemption threshold.
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How do mortgage brokers help you compare unit vs house purchases in South East Melbourne?
Step 1: Talk to us
Get in touch and we’ll assess your budget, deposit, and goals to determine which property types align with your situation and which lenders suit each option.
Step 2: Compare government scheme eligibility
We identify which first home buyer schemes apply to unit vs house purchases in your budget range and calculate the potential savings from each path.
Step 3: Analyse deposit requirements
We show you the exact deposit needed for units vs houses in your target suburbs, factoring in LMI, stamp duty, and any available government benefits.
Step 4: Review lender policies
Some lenders have different LVR limits for units vs houses, and investment lending policies vary by property type. We identify which lenders offer the best terms for your chosen property type.
Step 5: Calculate long-term costs
We compare total holding costs, strata fees for units vs maintenance for houses, alongside potential capital growth to show you the full financial picture.
Step 6: Secure pre-approval
Once you’ve chosen your property type, we arrange pre-approval with the lender that offers the strongest result for your specific situation.
What mistakes do buyers make when choosing between units and houses?
The biggest mistake is choosing based on purchase price alone without considering the total cost of ownership. Units carry strata fees that typically range from $2,000 to $8,000 annually, while houses require budgeting for maintenance, rates, and insurance that can vary widely. Both costs affect your borrowing capacity and ongoing affordability.
Many buyers also overlook the lending differences between property types. Some lenders cap unit lending at 90% LVR while allowing 95% for houses, and investment lending policies often differ between units and houses. Getting pre-approval before you start looking prevents disappointment when your preferred property type doesn’t align with your lending capacity.
How do unit and house prices compare across South East Melbourne?
The unit market in inner suburbs offers accessible entry points that house purchases don’t match. St Kilda units sit at $490,000, Windsor at $536,375, and South Yarra at $547,500. All three fall under the $600,000 stamp duty exemption threshold for first home buyers.
House medians across the South East Melbourne catchment start from Cheltenham at $1,287,000 and rise to Toorak at $5,800,500. The difference in deposit requirements is substantial: a 10% deposit on a Cheltenham house requires $128,700, while the same percentage on a St Kilda unit needs just $49,000.
$79,700 difference
Between a 10% deposit on the lowest-median house (Cheltenham, $1,287,000) and the highest-median inner unit (South Yarra, $547,500) in this catchment.
Entry-level units and houses at a glance:
- ›Entry-level units under $600,000: St Kilda ($490,000), Windsor ($536,375), South Yarra ($547,500)
- ›Mid-range houses $1.3M to $2M: Cheltenham ($1,287,000), Bentleigh ($1,745,000), Moorabbin ($1,292,500)
- ›Premium houses $2M+: Brighton ($3,311,500), Armadale ($2,340,000), Toorak ($5,800,500)
Source: CoreLogic, data to April 2026.
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Prefer to talk now? Call 03 7036 3356 |
Frequently Asked Questions
Which is easier to get a loan for, a unit or a house?
Houses are typically easier to finance because lenders view them as lower-risk security. Most lenders offer higher LVRs for houses (up to 95%) compared to units (often capped at 90%), and there are fewer location restrictions for house lending.
Do units or houses grow faster in South East Melbourne?
Houses generally show stronger capital growth over time, but units can outperform in specific inner locations with limited supply. Over the 12 months to April 2026, house growth ranged from +7.38% in Bentleigh to +5.75% in Cheltenham among the more reliable-sample suburbs, while unit performance was more stable but modest.
Can first home buyers use government schemes for both units and houses in South East Melbourne?
Yes – the First Home Guarantee applies to both property types up to $950,000 in South East Melbourne. The stamp duty exemption (up to $600,000) and FHOG ($10,000 for new homes up to $750,000) also cover both, but the price caps mean they primarily benefit unit purchases in this catchment.
What ongoing costs should I budget for when comparing units vs houses?
Units incur strata fees ranging from $2,000 to $8,000 annually plus council rates and insurance. Houses require council rates, insurance, and self-funded maintenance that can vary from $3,000 to $15,000 or more annually depending on property age and condition.
Are investment loans different for units vs houses in South East Melbourne?
Yes – many lenders apply stricter criteria to unit investments, including location restrictions and lower maximum LVRs. Some lenders avoid unit investments entirely, while others specialise in apartment lending with competitive terms for quality locations.
Should I use a mortgage broker or go to my bank when choosing between a unit and house?
A mortgage broker, every time. Different lenders have vastly different appetite for unit vs house lending, and some offer better terms for your chosen property type. We compare 60+ lenders to find the ones that suit your property choice and borrowing profile best.
Which South East Melbourne suburbs offer the best unit value for first home buyers?
For units under the government thresholds, St Kilda, Windsor, and South Yarra offer the strongest first home buyer benefits, with all three sitting under the $600,000 stamp duty exemption. For houses with growth potential, Bentleigh and Cheltenham provide better entry points than the premium Toorak-Brighton corridor.
Your Next Steps
Your choice between a unit and house affects your deposit requirements, government benefits, and long-term growth potential. The right decision depends on your budget, goals, and which lenders offer the strongest terms for each property type, all factors that vary significantly across our 60+ lender panel.
The right lender for your unit or house purchase depends on your situation, and that’s a conversation worth having. Talk to the EverLend team or call 03 7036 3356, and we’ll compare your options across 60+ lenders at no cost to you.
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External Resources
EverLend · St Kilda and South East Melbourne · General information only – this article does not constitute financial advice. Please consider your own circumstances and seek professional advice before making any financial decisions. · Last updated 16 July 2026