Neighbourhood characteristics have been linked to a range of health outcomes, including mental health. Despite the growth of master planned estates (MPEs) within Australia, few studies have investigated the physical and social correlates of mental health in residents of new housing developments. Methods This study aimed to identify the facilitators of, and barriers to, mentally healthy neighbourhoods using focus groups with residents of MPEs in metropolitan Perth, Western Australia. Focus group interviews were analysed using qualitative research software package QSR NVivo. Results and Conclusions Results suggest that mental health is strongly influenced by a sense of community and security, as well as an aesthetically pleasing environment. Residents of MPEs may experience a strong sense of community due to similarities in life-stage and the community building efforts of property developers. Expanding population size, social exclusion, and insufficient services may negatively affect the mental health of residents in MPEs. SO WHAT?: Identifying correlates of mentally healthy neighbourhoods may help urban planners design residential areas that promote healthy living.