Melbourne property market data, trends, forecasts

Melbourne property market news - key takeaways

• Price growth continues: Melbourne dwelling values climbed by +0.4 per cent in July, marking six months of consecutive growth. This rise translates to a $22,570 increase in the median dwelling value. However, values are still -3.4 per cent below their peak from March 2022, according to Cotality’s latest figures.
• Supply remains constrained: Cotality’s data highlights that Melbourne’s property market is grappling with low inventory levels, with national listings 20 per cent below the five-year average. This supply-demand imbalance continues to drive price growth in the Melbourne property market.
• Auction clearance rates steady: Domain data shows Melbourne’s auction clearance rate was 70 per cent for the week of August 3, 2025, reflecting stable demand.
• Rental market tightens: Melbourne’s rental market remains tight, with a vacancy rate of 1.8 per cent, as reported by SQM Research. Weekly rents have nudged up by +0.1 per cent over the past month, indicating ongoing demand pressures.
• Interest rates set to decrease: The Reserve Bank of Australia (RBA) recently reduced the cash rate by 0.25 percentage points to 3.60 per cent, with expectations of further cuts. This drop in interest rates is likely to enhance borrowing capacity and consumer sentiment, offering additional support to the Melbourne property market.

Melbourne property price movements

The Melbourne property market is on a roll, marking its sixth month of growth in dwelling values. While the increase is steady, widespread affordability pressures and a high supply of units are shaping future price trends.

Melbourne property prices - July 2025

In July, Melbourne's property values rose by +0.4 per cent, continuing the upward trend that started in February 2025. Over the quarter, values climbed by +1.2 per cent, with an annual growth of +0.5 per cent. The median value for Melbourne properties in July 2025 was $803,424.

^{Source: Cotality}

Despite this growth, Melbourne's property values are still 3.4 per cent below their peak from March 2022. The current trend is buoyed by low inventory levels and a boost in both borrowing capacity and consumer confidence due to recent interest rate cuts.

House prices in Melbourne

Melbourne house prices saw a +0.4 per cent increase in July, with a quarterly rise of +1.5 per cent. Over the past year, house values have grown by +1.0 per cent, bringing the median house price to $952,339.

^{Source: Cotality}

The Melbourne housing market is reaping the benefits of recent interest rate cuts, which have stimulated buyer activity and increased budgets. However, Melbourne house prices are still on the mend from previous declines and remain below their historical highs. The mix of low supply and improved affordability is likely to support further growth in the Melbourne housing market.

Unit prices in Melbourne

Unit prices in Melbourne increased by +0.4 per cent in July, with quarterly growth of +0.5 per cent. However, over the past year, unit values have decreased by -0.8 per cent, with the median unit price at $621,281.

^{Source: Cotality}

The Melbourne unit market is still facing hurdles, with values not yet returning to their previous peak levels. Despite the recent monthly rise, the annual decline highlights ongoing affordability challenges and a high supply of units. Melbourne unit prices are expected to stabilise as interest rates continue to fall and buyer confidence improves.

Melbourne property market forecasts 2025-2026

Australia’s big four banks regularly release house price forecasts. These reports are part of their economic research to guide mortgage-lending decisions, manage risk, and demonstrate their market expertise. Here's what they predict for 2025 and 2026.

^{Sources: Westpac Housing Pulse, NAB Residential Property Survey, ANZ Australian Housing Chartpack, Commonwealth Bank Economic Insights}

Melbourne is anticipated to experience moderate growth in property prices for the rest of 2025 compared to other capital cities. These Melbourne property market predictions indicate a steady rise in prices, driven by lower borrowing costs and stable housing demand.

Melbourne home price forecasts 2025

Westpac expects Melbourne property prices to increase by +1.0 per cent in 2025. NAB forecasts a slightly higher growth of +2.3 per cent, while ANZ predicts a +4.1 per cent rise. 

These forecasts are shaped by the RBA's cash rate cuts, which are likely to make borrowing cheaper and boost buyer confidence. However, Melbourne's growth may be more gradual than Sydney's due to its typically slower response to rate changes.

RBA cash rate forecast 2025

On 12 August 2025, the RBA reduced the cash rate by -0.25 percentage points to 3.60 per cent. The Bank cited inflation returning to the 2–3 per cent target range, softer labour-market readings, and a subdued demand backdrop as key reasons for easing, while noting that uncertainty remains high. Here's where the major banks think the cash rate is heading next:

• CBA: Two more cuts in 2025 (September and December), ending 2025 at 3.35 per cent, then two cuts in Q1 2026 to 2.85 per cent.
• Westpac: No September cut; two cuts by early 2026 (November 2025 and February 2026), to 3.10 per cent.
• NAB: One cut in September 2025 and another in February 2026, to 3.10 per cent.
• ANZ: Two cuts in 2025 (September and November), then two in Q1 2026, to 3.10 per cent.

What this means for the Melbourne market

Rate cuts are expected to stabilise Melbourne and encourage more upgraders, but the city tends to lag behind Sydney in early-cycle growth. With softer momentum over the past year, cheaper credit is more likely to result in a steady increase rather than a rapid surge. 

The first noticeable lift in enquiries is expected at the affordable-to-mid price points, with the prestige segments following as confidence grows. Historically, Melbourne responds well to sustained easing, albeit with a smaller impact than Sydney.

Melbourne house prices graphs and charts

Melbourne's house price growth over the last 5 years has seen a modest rise during 2020-2021, followed by a deeper and prolonged downturn in 2022. As of July 2025, Cotality data shows a +0.4 per cent increase in July, a +1.2 per cent rise over the last three months, and a +0.5 per cent change over the past 12 months, with values still -3.4 per cent below the March 2022 peak.

The five-year chart analysis highlights that Melbourne's recovery has been slower compared to other capitals, with the quarterly growth line only recently turning positive. The annual change has hovered near zero for much of 2023, indicating a gradual and uneven recovery.

Melbourne property prices graph over 30 years

Melbourne property growth over the last 10 years has been shaped by several key factors. There was a significant upswing from 2013 to 2017 driven by investor activity and migration, followed by a downturn due to a credit squeeze from 2017 to 2019. The market then experienced a boom from 2019 to 2021, driven by low interest rates and increased demand during the pandemic.

Over the past three decades, Melbourne has seen cycles of growth and correction. The current market is influenced by recent rate cuts and strong population growth. Homeowners today are cautiously optimistic, buoyed by early signs of recovery and a stabilising market. However, buyer sentiment remains cautious due to the lingering effects of the 2022 downturn and ongoing economic uncertainties.

Melbourne selling statistics

Melbourne's property market in July 2025 is buzzing with activity, showing significant changes in sales volumes and market dynamics. The data highlights shifts in buyer and seller behaviour, mirroring broader economic conditions and local trends.

Melbourne sales volume and days on market

In July 2025, Melbourne saw an +8.0 per cent rise in sales volume compared to the previous year. Properties took a median of 37 days to sell, which is slightly longer than last year.

^{Source: Cotality}

This increase in sales volume points to strengthening demand in the Melbourne property market, standing out against the national trend where some areas experienced declines. The longer median days on market suggest that while properties are selling, buyers are taking a bit more time to decide, possibly due to more options or careful financial planning.

Melbourne new and total listings

Melbourne experienced an -11.2 per cent drop in new listings and a -15.0 per cent decrease in total listings compared to the previous year.

^{Source: Cotality}

The decline in both new and total listings indicates a tightening of available properties, which might be driving the increased sales volume as buyers compete for fewer options. This often leads to a more competitive market, potentially pushing prices up as demand exceeds supply.

Melbourne vendor discount and auction clearance rates

Vendor discounting and auction clearance rates offer insights into negotiation dynamics and market confidence. Vendor discount refers to the gap between the initial asking price and the actual sale price, while auction clearance rates show the proportion of properties sold at auction, indicating market demand and competition.

Melbourne vendor discount

^{Source: Cotality}

The vendor discount in Melbourne was recorded at -3.3 per cent, showing that sellers are offering smaller discounts compared to earlier in the year. This suggests a stronger market where sellers are confident in sticking closer to their asking prices, likely due to the competitive environment created by fewer listings.

Melbourne auction clearance rates

^{Source: Domain}

Auction clearance rates in Melbourne for the first week of August 2025 were at 70 per cent. This high clearance rate reflects strong buyer interest and competition, with many properties selling under the hammer. The steady clearance rates over the past four weeks indicate consistent demand, suggesting that despite fewer listings, the market remains active and competitive.

Melbourne property investing

Melbourne's rental market is experiencing a phase of relative stability, with some easing of pressures. Although rental growth has slowed compared to previous years, the market remains tight, mirroring broader national trends. Let's delve into the statistics on rental rates, yields, and vacancy trends to better understand the current conditions in Melbourne.

Melbourne rental market

Rental rates in Melbourne have seen a slight increase, with annual changes for houses at +0.7 per cent and for units at +1.7 per cent as of July 2025. Gross rental yields in Melbourne are steady at 3.7 per cent, aligning with the national average. These figures indicate a stable rental environment, though growth is slower compared to other capitals like Brisbane and Darwin.

^{Source: Cotality}

Despite the slower growth, Melbourne's rental market is still driven by strong demand, especially in high-density inner suburbs where availability has improved slightly. However, the market remains tight in the middle ring suburbs, maintaining upward pressure on rents. The slight rise in vacancy rates has given renters more options, but without significant new supply, rent pressures are unlikely to ease significantly.

Melbourne vacancy rates

Vacancy rates are a crucial indicator of the balance between supply and demand in the rental market. Nationally, vacancy rates have shown a small increase, indicating a minor easing of rental pressures. However, most capitals, including Melbourne, remain historically tight. Melbourne's vacancy rate in July 2025 was 1.8 per cent, slightly higher than the previous year, suggesting a marginal improvement in rental availability.

^{Source: SQM Research}

Melbourne's vacancy rate of 1.8 per cent is above the national average of 1.2 per cent, indicating a relatively balanced market compared to other capitals. This rise from 1.5 per cent a year ago suggests an oversupply or reduced demand, potentially easing rental pressure for tenants. However, the market remains tight, particularly in the middle ring suburbs, and rents are unlikely to decrease without a significant increase in new supply.

Louis Christopher, Managing Director of SQM Research said in his latest rental market report

“Vacancy rates remain tight across most capital cities, and this is continuing to place upward pressure on rents,” said Louis Christopher, Managing Director of SQM Research. “While there are short-term fluctuations—particularly in Perth and Canberra—the broader trend is clear: rental affordability is deteriorating, especially in Sydney, Brisbane, and Hobart. Unless we see a meaningful uplift in rental supply, particularly in the inner and middle rings of our major cities, the market will remain challenging for tenants heading into spring.”

Melbourne aligns with the national perspective but is slightly more balanced than Sydney, with vacancy rates closer to equilibrium while still tight. This slight buffer has kept rent growth to more modest monthly changes.

The July figures indicate better availability in high-density inner suburbs, offering renters a bit more choice than last year. Even so, vacancy remains below the level needed to relieve pressure across the middle ring, so rents are unlikely to decrease without new supply.

^{Source: Cotality}

Highlights for Melbourne’s high growth areas

• Frankston has climbed to the top spot with a median price of $769,357, marking an annual increase of +2.7 per cent. This is a notable jump from its second place in May, indicating a resurgence in buyer interest.
• Tullamarine – Broadmeadows has slipped slightly to second place, with a current median of $690,686 and a +2.5 per cent increase. Despite this drop, it remains a strong contender in the top three, driven by steady demand from commuters. Suburbs to watch include Melbourne, Southbank, and Docklands.
• Casey – North continues to be a consistent performer, now ranked sixth with a median of $835,459 and a +2.1 per cent growth. This highlights its resilience in the face of modest gains.
• Dandenong holds its position as a key player, currently ranked fourth with a median of $743,298 and a +2.2 per cent growth. Its stable figures suggest ongoing investor interest, even with low percentage movement. Keep an eye on suburbs like Caroline Springs, Taylors Hill, and Melton West.
• Hobsons Bay is maintaining steady growth, now in fifth place with a median of $895,152 and a +2.2 per cent increase. Its appeal lies in offering a coastal lifestyle that continues to attract buyers.

These highlights blend the latest August 2025 data with insights from the past six months, shedding light on ranking changes, consistent performers, and areas where even modest percentage shifts tell a compelling market story.