Here is what I found
Middle suburbs would probably be good - ones that do come down a bit in price because they are that little bit more out distance wise (approx 10 -15kms) These are not as expensive as the inner suburbs.
Places like Balaclava, Oakleigh, Murrumbeena, Carnegie, Malvern East, Ashburton, Moorabbin, Cheltenham(these are all on the South Eastern side of the city).
The closer you get to the beaches the more it will cost. All of the above are on train lines and about 15-20 minutes by train from city or same by car.
It depends on whether you want to buy, rent, and if the schools are to be government or private.
Of course the suburbs that have the good government schools are usually a lot more expensive.
Some other lady said
We have three young children and live in Ormond / McKinnon. This is on the train line with great access to the city, its 5 to 10 minutes to the beach, there are outdoor pools and is also only 15 minutes from great shopping at Chadstone or Southland.
Our children are 9, 7 and 1 and we have found the public schools in the area to be excellent, there are also many good private schools. We have been away for 3 years and are returning there next week. Across the Nepean Highway to the Bayside suburbs of Brighton, Sandringham and Hampton the real estate prices are significantly higher.
someone else -
Southbank is definitely my recommendation! It is only a ten minute walk to the city, it has excellent public transport (tram, bus and train), the road cafes are great and the casino and Yarra river are nearby.
Another gent gave this review
Sought after is around the East, South and Southeast side, so this pushes up the price of the properties on those sides are pretty expensive. The inner suburbs are older houses, these are pretty dense and small, with hugely expensive prices due to their closeness to the CBD.
I used to live in Collingwood and Clifton Hill (the inner suburbs) with my parents. Then got married in 2000 and started looking for our own place. The obvious path will be to look around the area that I have always lived in. However after searching for some time we realized that with our budget of about $300K, we could only find a run-down house that we would need to renovate extensively. We were looking further and further towards East and South East area, until we reached Rowville and felt that it had become ridiculously too far, not to mention the peak-hour traffic report that you usually hear from the radio on the M1.
We finally found Point Cook, west of Melbourne. It is about 20 minutes from the city via the Westgate Freeway with plenty of new estates being opened, affordable prices, close to the sea and infrastructure that is aimed at young families. Just have a look yourself if you are interested to find out.
The flat newly developed (and industrial) areas are in the north and west. East and south east are the better areas with better living areas and life styles. What it comes down to is that cheaper areas are western and northern burbs which tend to be more industrialized. Nicer areas tend to be a little more expensive but worth the cleaner areas. Mind you some of the inner suburban areas are very expensive for a small dingy terrace house.
A differing opinion
Melbourne is NOT the world's most liveable city at all ! How arrogant is that ?? It's the best Aussie has got and that is thanks to the multiculturals. I've lived there for 4 years and know it very well. The older western inner suburbs are good like Nth Melbourne and Brunswick or older parts of St Kilda in the other direction. There are many nice inner suburbs around and also Yarraville over the bay is a very quaint old area. There is no escaping the hyped prices now on property unless you want to buy a crappy oversized legoland house on a muddy subsiding outer suburb scheme, which you should steer well clear of. Also, that Docklands is a nightmare c o c k up so I would forget that too. It is a hideous mess. I also hope you get used to the world worst rude drivers ! Go
One lady resident born and bred
I grew up in Glen Huntly and I loved living there as it was close to nice leafy suburbs like Caulfield and Bentleigh. When my husband and I purchased our first place we chose Cheltenham as we could not afford to buy into Glen Huntly/Caulfield. After living here for 2 years I can honestly say that it would be one of the best places in melbourne to live. We are right next to trains, Southland shopping centre, good schools, cafe's, beach, a major highway and every other amenity you could think of (including an excellent bulk billing medical centre that is open until 10pm every day). All this only 19k from Melbourne CBD. We have now purchased our second home in Highett and I am thrilled to be staying in the area.
BrightonExpensive area – its one of Melbourne's top suburbs
Beaumaris,Nice family area – close to beach / golf courses / Westfield Southland
BoroniaFull of bogans – relatively close to Knox City Shopping Centre
Dandenong.Even more bogans.
Brighton & Dandenong are worlds apart in terms of location and cost of living –Another
righton is one of the most expensive suburbs in Melbourne; similarly livable but more affordable suburbs are Ormond and Hampton.Lates
If you're in your 20s or early 30s, childless and want to live in a ‘trendy’ (I despise this term, but it’s pretty apt) south-east suburb, look at South Yarra (where I live), Prahran or Windsor. The latter two are more affordable, but there are seedy areas.
If you're in your early 30s or over, have children or will have children in the near future and want to live in a yuppie suburb, look at Malvern, Malvern East, Armadale, Glen Iris and Caulfield/Caulfield North/Caulfield South/Caulfield East. Elsternwick, St Kilda East and Carnegie are also family friendly, but less yuppie-ish.
I may be biased, but my vote goes to South Yarra. It has its faults (e.g. high median house price [although, you intend on renting] and high wanker factor), but I can’t think of any other south-east suburb with as many great cafes, restaurants, shops, schools, parks, bars and clubs. The public transport is also very good and  it's close to the city/CBD.
How I got my visa, Life, Lumps and spirit, Hate your new country? Your not alone! A good Furniture Rental company in Sydney,Why do immigrants leave Australia?, Sydney - Scotland island - hidden gem, Malls in Sydney, Living in St Ives, Arriving in Sydney, Driving through Sydney - first day, How expensive is Sydney