Is Now a Good Time to Buy in South East Melbourne, The 2026 Market Check
If you've been watching South East Melbourne's property market and wondering whether to move now or wait, you're asking the right question at an interesting moment. The cash rate has shifted, unit medians across the inner south have stayed relatively flat, and the gap between what buyers expect and what lenders will assess has quietly widened for some income types.
None of that tells you the answer. Market timing is genuinely outside a broker's expertise, and anyone who says otherwise is selling something. What a broker can tell you is whether YOUR borrowing position is strong right now, and whether the conditions you'd be borrowing in suit your income type, deposit size and target suburb.
Our team works with buyers across South East Melbourne at every stage of this decision, comparing options across a panel of 60+ lenders. Whether the home loan side of it feels settled or still uncertain, that's where the real preparation happens.
Key takeaways
- Every approved suburb's house median sits above the $950,000 scheme cap.
- Lenders assess at roughly 9%, not the current 4.60% cash rate.
- Timing matters less than your borrowing position being actually ready.
Is now actually a good time to buy in South East Melbourne?
That depends almost entirely on your own position, not the calendar. The RBA cash rate sits at 4.60% as of 30 September 2026, lenders are assessing applications at approximately 9% (the actual rate plus the APRA 3.0% serviceability buffer), and South East Melbourne's property medians range from around $1,280,000 for houses in Moorabbin and Cheltenham to well above $4,900,000 in Toorak. Whether that combination suits your deposit, income and target suburb is a different question for everyone.
Source: Reserve Bank of Australia; APRA; CoreLogic (via YIP, June 2026).
What do South East Melbourne's current medians actually tell buyers?
CoreLogic data shows Moorabbin with a median house price of $1,280,000 and 12-month growth of 3.23%, and Cheltenham at $1,298,750 with growth of 8.23%. At the more established end, Brighton sits at $3,250,000 and Sandringham at $2,430,000, where growth reached 14.35% over the same period. Units tell a different story: St Kilda units have a median of $512,000, Oakleigh $580,000, and Prahran $500,000, all well under the $950,000 scheme cap that applies across every approved suburb in the area.
The practical read on this is that first-home buyers are almost always looking at units in South East Melbourne. Every house median across the 28 approved suburbs sits above the $950,000 cap for the First Home Guarantee and the Family Home Guarantee, so the government schemes that remove the need for a 20% deposit are mostly a unit conversation here. That doesn't make houses off the table, but it does change what the deposit requirement looks like without a scheme behind you.
Source: CoreLogic (via YIP, June 2026).
"Most buyers who ask whether now is a good time are really asking whether they're ready. Those are different questions, and the second one is the one we can actually help with."
Evelyn Clark · Director, Mortgage & Finance Broker · Chat to Evelyn →
What do the current lending conditions mean for borrowers in this area?
The gap between the cash rate and the assessment rate is the thing most buyers underestimate. At 4.60%, the cash rate sounds manageable. At approximately 9%, which is what lenders apply when working out what you can borrow, the serviceability picture looks different. That buffer exists so you can handle rate rises without defaulting, and it stays in place regardless of where the RBA sits on any given month.
APRA's debt-to-income cap adds another layer for higher earners. Since 1 February 2026, authorised deposit-taking institutions can write no more than 20% of new lending at a DTI of 6x gross income or higher. Non-bank lenders aren't subject to the same cap, which is one reason lender choice matters more than the headline cash rate movement for borrowers in a premium market like South East Melbourne.
What shifts your borrowing position right now:
- › Credit card limits: lenders assess these as fully drawn at approximately 3% to 3.8% of the limit per month, regardless of your balance.
- › Income shading: overtime, bonuses and shift penalties are discounted by many lenders, which changes your assessed income substantially if a large portion of your pay is variable.
- › HECS/HELP debt: counted as an ongoing commitment against your income, reducing borrowing capacity by the repayment amount, not the balance.
- › Lender DTI appetite: some lenders have used more of their high-DTI quota than others, so timing within a quarter can matter for higher earners.
Source: APRA; Reserve Bank of Australia.
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What government schemes are available to South East Melbourne buyers right now?
Several federal schemes are open, though the area's price levels determine how much work they can actually do for you. The First Home Guarantee (the Australian Government 5% Deposit Scheme) lets eligible buyers purchase with a 5% deposit and no LMI, with a $950,000 price cap across every approved suburb here. Income caps were removed in October 2025, so this is now open to more buyers. The Family Home Guarantee extends this to single parents at a 2% deposit, with the same $950,000 cap and no first-home-buyer requirement.
Help to Buy, the federal shared-equity scheme, contributes up to 40% of the purchase price on a new home and up to 30% on an existing one. Income caps apply: $103,000 for singles and $165,000 for joint applicants or single parents in 2026-27, with the same $950,000 price cap for the area. There is currently no open state shared-equity scheme in Victoria — the Victorian Homebuyer Fund is closed to new participants.
The cap-versus-median reality for this area:
- › Houses: every suburb's house median sits above $950,000, so scheme-assisted house purchases are effectively unavailable without a substantial deposit already in place.
- › Units: 22 of the 28 approved suburbs have unit medians under the cap — St Kilda at $512,000, Windsor at $530,000 and Cheltenham at $700,000 are three examples across the area.
- › First Home Owner Grant:$10,000 for new homes only, with a $750,000 price cap. Applies to apartments and units in new developments, not established homes.
Source: Housing Australia; State Revenue Office Victoria.
When does waiting actually make sense for a South East Melbourne buyer?
There are genuine situations where holding off is the right call, and a broker who only ever says "buy now" isn't giving you advice. If your deposit is at 8% and you're six months away from 10%, waiting is usually worth it — the LMI saving and the borrowing terms at 10% are meaningfully better, and the market would need to move sharply in that window to outweigh it. The same applies if your employment is in its first few months at a new role in a different field, where most lenders want to see probation completed before they'll assess your income at full value.
Waiting becomes the worse choice when what you're really doing is trying to predict the market. South East Melbourne's established suburbs have shown consistent long-run price growth, and the suburbs where unit entry is most realistic — the inner south and the bayside corridor — sit close enough to the CBD that underlying demand doesn't disappear in soft patches. Staying out of the market for two or three years hoping for a dip that doesn't come is one of the more common ways buyers end up worse off, not better.
"Where I'd focus in this market is the deposit and the income structure, not the calendar. A buyer with a clean application at 10% deposit in a unit suburb is well placed. A buyer at 5% hoping the timing works out is taking on a different kind of risk."
Evelyn Clark · Director, Mortgage & Finance Broker · Chat to Evelyn →
How do you work out where you actually stand right now?
The fastest way to get a clear picture is a borrowing capacity conversation, not a calculator. Calculators use one set of assumptions; lenders use their own serviceability models, and the difference between them can be $80,000 to $150,000 in assessed capacity depending on your income type and the lender. Three things move that number more than anything else: how your income is structured (base salary, variable components, rental income), what commitments are showing on your credit file (card limits, HECS, existing loans), and which lender's model is applied to your profile.
A broker who has access to 60+ lenders can run your scenario across multiple policies before an application ever touches a credit file. That matters in a market like South East Melbourne where the entry price is high enough that a meaningful difference in assessed capacity directly changes what you can buy, not just what your repayments are. Whether you're looking at Bentleigh, Cheltenham or Moorabbin as a more accessible entry point across the area, the lending position is what determines whether any of them are within reach.
How to work out your timing in South East Melbourne, step by step
Step 1: Talk to us
We start by understanding your income structure, deposit position and what you're trying to buy, so we can tell you whether your application is ready now or whether a short preparation window would make a material difference.
Step 2: Assess your borrowing position across lenders
We run your scenario across relevant lenders to find which ones assess your income type most favourably and which have capacity within their DTI quota right now.
Step 3: Match to the right loan structure and scheme
We identify whether any scheme — First Home Guarantee, Help to Buy, or the Victorian first-home duty concession — applies to your purchase, and structure the loan to maximise what you can borrow without overextending.
Step 4: Support you through to settlement
Once you're ready to move, we manage the approval process, coordinate with your conveyancer, and handle any lender conditions that come up between approval and settlement.
What goes wrong when buyers rush the timing decision?
The three mistakes that cost South East Melbourne buyers most:
- › Applying too early on variable income: if overtime, commissions or a second job haven't been running for the period the lender requires, the income is excluded or shaded — applying six months earlier than you should can cost you more in assessed borrowing capacity than any rate move.
- › Spreading applications across lenders: each application shows as a credit enquiry and stays on your file for five years. Multiple applications in a short window tell a lender you've been declined, even if you haven't.
- › Assuming the calculator is the lender: online borrowing calculators use simplified models. A lender's actual assessment of the same applicant can come back materially lower, which derails a purchase contract that's already been signed.
Frequently Asked Questions
Will a rate cut make it easier to buy in South East Melbourne?
A rate cut reduces repayments but doesn't change the assessment rate much, since lenders add a 3.0% buffer on top of the actual rate. A cut can lift assessed borrowing capacity slightly, though the effect in a high-price market like South East Melbourne is often smaller than buyers expect.
Can first home buyers use government schemes to buy in South East Melbourne?
Yes, but primarily for units. The First Home Guarantee and Help to Buy both apply with a $950,000 price cap, and every house median in the area sits above that. Twenty-two of the 28 approved suburbs have unit medians under the cap.
Is it better to buy now or wait for prices to fall in South East Melbourne?
No broker can answer that, and neither can the data. What a broker can tell you is whether your borrowing position is strong today and whether a short preparation window would improve it meaningfully — that's the more answerable question.
What deposit do I need to buy in South East Melbourne without LMI?
Standard loans require a 20% deposit to avoid LMI, though the First Home Guarantee removes that for eligible unit buyers under the $950,000 cap. Some professional occupations qualify for LMI waivers at lower deposit levels through specific lender policies.
Does the first home duty exemption apply to South East Melbourne properties?
Yes, Victoria's first home buyer duty exemption applies at a dutiable value of $600,000 or below, with a concession on a sliding scale up to $750,000. Most South East Melbourne unit purchases in the lower suburbs fall within that range; houses do not.
Should I use a mortgage broker or go directly to a lender in this market?
A mortgage broker, every time — particularly in a market where lender DTI appetite varies quarter to quarter. One lender's model may decline a file another would approve, and a broker who can access 60+ lenders finds that out before a credit enquiry is lodged.
Your Next Steps
For buyers watching South East Melbourne's market, the question isn't really about timing — it's about whether your borrowing position is strong enough to move when the right property appears, and whether the structure of your loan suits what you're trying to do. That's a conversation that takes 30 minutes and gives you a clear answer either way.
The right lender for your situation depends on your income type, your deposit and what you're buying — and that's exactly the conversation worth having. Contact the EverLend team or call 03 7036 3356. We'll compare your options across 60+ lenders and tell you where you actually stand.
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External Resources
EverLend · South East Melbourne · Ever Lend Pty Ltd (ACN 625 080 515), authorised under Australian Credit Licence 517192 · General information only - this article does not constitute financial advice. Please consider your own circumstances and seek professional advice before making any financial decisions.
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