I'm living in the East in Doncaster East. $330 p/w 2 Bedrooms, 2 Bath, 1 Garage. 500K in the areas around me (Donvale, Templestowe, Doncaster, etc) won't get you any more than basically a small 1-2 Bedroom Place with 1 Bath and such. A house on 1/4 of an Acre with 2 Bedrooms, 2 Baths sold down the road from us 2 weeks ago for $978,000.
$500 p/w will get you a decent place. Probably 3 Bedrooms, 2 Baths, Double Garage in the surrounding areas. Takes me about 3 minutes to get to the Eastern Freeway and then 10 minutes or so on an okay run to get into the city.
The West would probably be more affordable.