If you’re dreaming about a custom home in Melbourne, the first big decision isn’t the façade or the floor plan. It’s where you build.
Different suburbs offer very different lifestyles, block types and council rules. The right area can make your custom home feel like it belongs – and help protect your long-term resale value.
Below, we’ll walk through:
- How to choose the right Melbourne suburb
- The best Bayside and Inner-East pockets for custom homes
- Emerging areas where knockdown-rebuilds and new builds still stack up
- What to check (zoning, overlays, block shape) before you sign a contract
You’ll also see links so you can talk to experienced custom home builders in Melbourne when you’re ready to sense-check a suburb or site.
Ready to talk about real numbers for your block?
How to Choose the Best Suburb in Melbourne for Your Custom Home
Before you fall in love with a block, zoom out and think about the lifestyle, not just the house.
Key questions:
- How long do you want your daily commute to be?
- Which school zones or private schools do you want access to?
- Are you after beachside, leafy streets, inner-city buzz or something quieter and more affordable?
- Is your project likely to be a knockdown rebuild in an established area, or a new build on vacant land?
Bayside: Melbourne’s Coastal Hotspot for Custom Homes
The Bayside strip southeast of the CBD is famous for beaches, cafés and strong property values. It covers suburbs like Brighton, Brighton East, Sandringham, Hampton, Black Rock, Beaumaris and more.
For custom homes, Bayside offers:
- Coastal lifestyle with bike paths, marinas and family-friendly beaches
- A mix of period homes and architectural new builds
- Plenty of knockdown-rebuild opportunities on established blocks
Brighton & Brighton East Blue-Chip Bayside Luxury
Brighton and Brighton East are some of Melbourne’s best-known prestige suburbs, with big homes, leafy streets and strong long-term demand.
Good for:
- High-end luxury custom homes with basements, pools and multi-car garages
- Statement façades and architectural designs
- Families wanting beach access plus elite schools
Think generous two-storey homes, large open-plan living, full-width alfrescos and careful attention to façade detail so your home sits comfortably among other premium properties.
Hampton, Sandringham & Black Rock Family-Friendly Coastal
Sitting just south of Brighton, Hampton, Sandringham and Black Rock offer a slightly more relaxed family feel while still being highly sought-after.
Good for:
- Families who want to walk to the beach, parks and village shopping
- Custom homes on mid-size blocks with good street character
- Knockdown-rebuilds that blend coastal style with practical family layouts
Design ideas here include classic coastal or Hamptons-inspired homes, generous kitchens with butler’s pantries, and indoor-outdoor living that catches sea breezes.
Mentone, Parkdale & Mordialloc Coastal with Better Value
Further down the line, Mentone, Parkdale and Mordialloc still offer a Bayside lifestyle but at generally lower entry prices than Brighton or Hampton.
These suburbs suit:
- Young families upgrading from units or townhouses
- Custom designs that balance budget with strong resale appeal
- Larger family homes on blocks that may have older houses ready for replacement
Williamstown & Altona Westside Bayside
On the western side of Port Phillip Bay, Williamstown and Altona give you harbour views, historic character and growing interest from buyers looking beyond the south-eastern Bayside belt.
Williamstown, in particular, has a strong heritage feel and views back to the city, making it ideal for tasteful custom homes that respect period streetscapes.
Inner East: Leafy, Established and Perfect for Luxury Custom Homes
The Inner East is one of the most desirable regions in Melbourne, with suburbs like Toorak, South Yarra, Armadale, Hawthorn, Kew, Camberwell, Balwyn and Canterbury regularly ranking high for liveability and school access.
Most custom builds here are knockdown-rebuilds or major renovations, because vacant land is rare.
Toorak, South Yarra & Armadale Ultra-Premium
These blue-chip suburbs are home to some of Melbourne’s most expensive real estate.
Ideal for:
- High-budget custom homes, often with basements and lift access
- Architectural designs that maximise tight blocks and height restrictions
- Buyers who want prestige, privacy and proximity to the CBD
If you’re considering building here, it’s crucial to work with custom home builders who understand local planning rules and the expectations of the area.
Hawthorn, Kew & Camberwell Family Prestige
Hawthorn, Kew and Camberwell combine prestige with strong family appeal: big period homes, leafy streets, tram lines and a dense concentration of private schools.
Custom homes often either:
- Retain a heritage façade and rebuild/extend behind it, or
- Replace tired post-war housing with high-quality new builds that respect neighbourhood character
Floor plans here often include multiple living areas, generous bedrooms and off-street parking, all wrapped in a classic but modernised architectural style.
Balwyn, Canterbury & Surrey Hills Leafy and Spacious
Heading a little further east, Balwyn, Canterbury and Surrey Hills offer spacious blocks, quiet streets and strong long-term demand among families.
These suburbs are great options if you:
- Want a large custom family home with a decent backyard
- Prefer a calm, leafy environment over the hustle of inner-city areas
- Are planning a “forever home” with room for kids, guests and future flexibility
Beyond the Inner Ring: Emerging Areas for Custom Homes
If you’re priced out of the blue-chip pockets, there are still many liveable, high-potential suburbs where a custom home makes sense.
Inner North: Brunswick, Northcote, Preston & Coburg
The inner northern suburbs blend period charm with a creative, urban vibe. Think Brunswick workers’ cottages, Northcote hill views, and Preston or Coburg blocks ripe for knockdown-rebuilds.
These areas suit:
- Architect-designed custom homes on narrow or sloping sites
- Modern, energy-efficient designs that weave around heritage streetscapes
- Smaller but smarter homes that prioritise light and storage over sheer size
East & South-East: Blackburn, Glen Waverley, Ringwood & Mount Waverley
Further out, Blackburn, Glen Waverley, Ringwood and Mount Waverley offer good transport, schools and shopping, with many older homes ready for replacement.
They’re ideal for:
- Families who want a bigger custom home on a decent-sized block
- People who prefer suburban quiet with easy access to freeways and trains
- Projects that focus on value, space and long-term livability
Outer Suburbs with Value and Growth
Outer suburbs like Epping, Berwick, Caroline Springs and similar corridors often appear in lists of more affordable but still liveable areas.
They can be good candidates if:
- You’re a first-home buyer or upsizer with a tight budget
- You’re happy to trade proximity to the CBD for more space
- You want to design a custom home from scratch on a vacant block
Matching Your Custom Home Style to the Suburb
Your suburb often hints at what style will make the most sense (and hold value) over time
Suburb Area | Typical Custom Home Style & Design Notes |
Bayside | Coastal or modern designs with lots of glass, balconies, alfrescos and pools. |
Inner East | Classic, heritage-inspired or contemporary luxury with refined detailing. |
Inner North | Architect-led, urban, sustainable designs that make clever use of compact or tricky sites. |
Outer suburbs | Spacious family layouts with multiple living zones, home offices and big backyards. |
Good custom home builders will take cues from your street and suburb, then tailor the design so your home feels both unique and “right for the area”.
What to Check Before You Buy a Block
Before committing to a site, always look into:
Overlays and Planning Controls
- Heritage overlays or neighbourhood character controls can limit demolition and façade changes.
- Bushfire, flood or coastal overlays can increase construction costs and design complexity.
Block Shape, Slope and Easements
- Irregular shapes may restrict the footprint you can build.
- Sloping blocks can be brilliant for split-level homes with views, but add structural complexity.
- Easements can limit where you can place the house, pool or garage.
Local Council Expectations
Each council has its own approach to:
- Setbacks and maximum height
- Streetscape and façade expectations
- Car parking and access
What to Check Before You Buy a Block
Before committing to a site, always look into:
Overlays and Planning Controls
- Heritage overlays or neighbourhood character controls can limit demolition and façade changes.
- Bushfire, flood or coastal overlays can increase construction costs and design complexity.
Block Shape, Slope and Easements
- Irregular shapes may restrict the footprint you can build.
- Sloping blocks can be brilliant for split-level homes with views, but add structural complexity.
- Easements can limit where you can place the house, pool or garage.
Local Council Expectations
Each council has its own approach to:
- Setbacks and maximum height
- Streetscape and façade expectations
- Car parking and access
Ready to Choose Your Suburb and Start Designing?
Choosing between Bayside, the Inner East or one of Melbourne’s emerging pockets is a big decision.
FAQs about Best Melbourne Suburbs for Custom Homes
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Which suburbs are best for a luxury custom home in Melbourne?
Typically, the top end of Bayside (Brighton, Brighton East, Hampton) and the Inner East (Toorak, South Yarra, Armadale, Hawthorn, Kew, Canterbury) attract the highest budgets and most architectural homes, thanks to location, schools and long-term capital growth.
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Where are families building custom homes near the beach?
Family-friendly coastal building hotspots include Hampton, Sandringham, Black Rock, Beaumaris, Mentone, Parkdale and Williamstown, where you get a blend of beaches, parks, schools and village-style shopping.
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Where can I find better value while still building a custom home?
Look to emerging or middle-ring suburbs like Blackburn, Glen Waverley, Ringwood, Preston, Coburg and parts of the outer southeast and northwest, where older housing stock and reasonable block sizes give you scope for a well-designed new home without top-tier blue-chip pricing.
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Do I need a planning permit to knock down and rebuild?
It depends on your suburb, overlays and the specifics of your design. Many straight knockdown-rebuilds rely mainly on a building permit, but heritage or neighbourhood character overlays, and multi-dwelling developments, usually trigger town planning.
Start your project with Pascon
Bring your site details, must-haves, and a ballpark budget. We will map a clear path from concept to handover and give you realistic timings for your suburb.
