Ten Victorian suburbs where home sales have crashed

From hot property to cautionary tale, the fallout in these once-booming burbs is brutal. SEE THE LIST

3 min read

June 27, 2025 - 12:00PM

Sales have plunged in key Melbourne and regional suburbs like Glen Waverley, Doncaster and Geelong West, as affordability pressures, land tax hikes and oversupply spook buyers and investors.

A new property report has revealed the 10 Victorian suburbs where home sales have crashed hardest — and the findings are a grim warning for buyers betting on the wrong markets.

According to Hotspotting’s Winter 2025 Price Predictor Index, a wave of former favourites, including Glen Waverley, Doncaster and Geelong West, have seen house or unit sales halved in just 12 months, marking them as the worst performers in the state and some of the weakest nationwide.

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The report tracked quarterly sales volumes across thousands of suburbs to identify market momentum.

And in these 10 postcodes, the momentum has stopped dead.

In Glen Waverley, unit sales fell from 84 to 40 per quarter.

In Broadmeadows, house sales dropped from 52 to 26. In regional hotspot Geelong West, just 18 homes sold last quarter, less than half the volume seen a year ago.

Hotspotting director Terry Ryder says affordability is now the number one driver of buyer behaviour in Victoria, warning that suburbs with falling sales volumes could soon see price corrections.

Hotspotting founder Terry Ryder said the declines were not just a statistical blip, but a sign of deeper problems.

“We’ve seen a clear drop in demand in some key middle-ring and fringe suburbs,” Mr Ryder said.

“Affordability is king right now, and buyers are walking away from areas that don’t offer value.”

Mr Ryder pointed to unit-heavy suburbs like Doncaster, Box Hill and Williamstown as particularly vulnerable, not because buyers weren’t interested in apartments, but because prices no longer made sense.

“You can buy a one-bed apartment in Carlton or Kensington for under $500,000,” he said.

“In Doncaster or Monash, the same thing might cost you $800,000. That’s completely out of step.”

M R Advocacy director Madeleine Roberts says Melbourne’s apartment markets have become “oversaturated and overpriced”, with little capital growth potential and declining demand post-Covid.

M R Advocacy director and buyers agent Madeleine Roberts said oversupply was to blame for many of the unit market struggles.

“There’s no scarcity in these areas, and no urgency. That kills capital growth,” Ms Roberts said.

“If someone asked me what to avoid, I’d say most Melbourne apartments, they just don’t deliver returns.”

Ms Roberts said suburbs like Glen Waverley, Doncaster and Box Hill were once driven by international student and overseas family demand, but that demand hasn’t fully returned since Covid.

And the oversupply left behind has been dragging down the market ever since.

While some parts of Melbourne are bouncing back, others are floundering, particularly in the middle ring where prices no longer reflect value, experts warn.

“It’s not rocket science. Too much supply, not enough buyers, and poor affordability, that’s a dangerous mix,” she said.

Even fringe family areas like Thornhill Park and Trafalgar weren’t immune.

In both suburbs, Hotspotting data shows house sales have slowed sharply, a pattern Mr Ryder says is typical of estates with endless new land releases, which erode scarcity and limit long-term price growth.

But not all suburbs in the decline list are slowing for the same reasons.

Sales in Geelong West have halved in a year, but local experts say the drop reflects low supply, not low demand, and expect interstate buyers to drive a rebound.

Buxton Geelong East director Tony Moorfoot said Geelong West’s drop in house sales was less about demand, and more about supply.

“People move into Geelong West and don’t want to leave,” Mr Moorfoot said.

“It’s tightly held, so when listings dry up, so do sales.”

Mr Moorfoot said prices in the area had remained steady, and that recent buyer activity, especially from interstate, suggested confidence was already returning.

“The worst of the panic is behind us. We’re seeing interest from interstate buyers who see value in Geelong now that prices have cooled,” he said.

Buxton Geelong East director Tony Moorfoot says Geelong remains a top lifestyle choice for buyers, but Victoria’s policy settings have driven many “mum and dad” investors to the brink.

Victoria’s tax regime, however, is proving a much bigger problem.

All three experts pointed to land tax hikes, tight rental reforms, and investor compliance blowouts as major barriers for buyers, particularly “mum and dad” landlords who now feel squeezed from every direction.

“We’ve lost more than 24,000 rental properties in a year,” Mr Ryder said.

“When you’re already losing money and then get hit with thousands more in tax, the only option is to sell.”

Ms Roberts said many local investors were still paralysed, waiting for a more stable landscape, while interstate investors were pouncing.

“They’ve already made their money in Perth and Brisbane,” she said.

Units in suburbs like Box Hill and Doncaster are selling for up to $800,000 — far more than equivalent apartments in Carlton or Kensington, driving buyers toward better value elsewhere. Picture: NCA NewsWire / David Crosling

“Now they’re looking at Melbourne and saying: this is next.”

While some suburbs on the list may rebound, the M R Advocacy director said buyers need to do their homework.

“Don’t just follow headlines, follow fundamentals,” Ms Roberts said.

“There’s still opportunity out there. But you have to cut through the noise.”