Melbourne property market data, trends, forecasts

Melbourne property market news - key takeaways

• Price momentum mild: Melbourne home values inched +0.1 per cent higher in January, leaving values -0.7 per cent below the March 2022 peak according to the latest HVI data.  
• Demand under supply constraints: The Melbourne property market is being supported by persistently low advertised stock, with listings running about 21 per cent below typical five‑year levels, keeping buyer competition for fewer homes.  
• Auction activity steady: Recent auction clearance rates were around 63–64 per cent in early February, signalling steady but not heated auction conditions across the city.  
• Rental market tightening: Vacancy tightened from 2.0 per cent in December to 1.7 per cent in January, while combined asking rents were $672.95 per week and up +5.2 per cent year‑on‑year.  
• Financing outlook: A 25 basis‑point RBA increase in early February to a 3.85 per cent cash rate will tighten borrowing capacity and is likely to keep price growth in Melbourne modest until rates ease.

Melbourne property price movements

The Melbourne property market has shown a slight lift to start the year, with price gains being subdued and the recovery continuing at a measured pace. Local conditions remain mixed, with houses outperforming units and tight supply still supporting values in many parts of the city, according to recent Cotality commentary. 

Melbourne property prices - February 2026

Homes in Melbourne recorded small gains in January, with median values up +0.1 per cent for the month and +0.1 per cent over the quarter, while annual growth was a stronger +5.4 per cent, leaving the median at $830,371.

^{Source: Cotality}

The monthly rise of +0.1 per cent equates to about $830 added to the median value over the month, while the annual increase of +5.4 per cent is roughly a $44,840 lift compared with January last year. This steady but modest rise continues a gradual recovery path for Melbourne, where unit weakness has regularly held back headline gains even as house values have strengthened.

House prices in Melbourne

Melbourne house prices showed clearer strength in January, rising +0.2 per cent over the month and +0.3 per cent over the quarter, with annual growth of +6.5 per cent and a median house value of $989,356.

^{Source: Cotality}

The monthly increase of +0.2 per cent equals around $1,979 added to the median house over the month, while the +6.5 per cent annual gain is about $64,308 year‑on‑year. Houses have been the main driver of Melbourne’s recovery, supported by stronger demand at more affordable house price points, even as broader affordability pressures limit faster growth in the wider Melbourne housing market.

Unit prices in Melbourne

Units in Melbourne were weaker in January, down -0.2 per cent for the month and -0.2 per cent over the quarter, with annual growth of +2.7 per cent and a median unit value of $639,145.

^{Source: Cotality}

The monthly fall of -0.2 per cent represents about a $1,278 drop in the median unit value over the month, while the +2.7 per cent annual rise is roughly $17,257 year‑on‑year. Weakness in the apartment sector has been a consistent drag on Melbourne unit prices and on the city’s broader performance, leaving Melbourne unit prices lagging the pace of house gains and keeping the overall market recovery more subdued.

Melbourne property market forecasts 2026

Melbourne’s property outlook for 2026 shows a range of views from the big four banks, reflecting different assumptions about interest rates, local demand and supply.

^{Source: Westpac Housing Pulse, NAB Residential Property Survey, CBA Economic Update, ANZ Housing Outlook.} 

Melbourne’s forecasts sit somewhere between the national outlook and the stronger gains seen in some mid-sized capitals, reflecting a market that is improving but not running hot. These Melbourne house price forecast signals point to steady gains rather than a sharp rebound as local factors and higher borrowing costs keep growth measured.

Melbourne home price forecasts 2026

• CBA forecasts Melbourne to rise by +2 per cent in 2026. 
• NAB expects Melbourne to rise by +3.9 per cent in 2026. 
• ANZ forecasts Melbourne to rise by +2.1 per cent in 2026. 
• Westpac’s most recent view sees Melbourne rising by +7 per cent in 2026.

These forecasts reflect differing views on how quickly demand will respond to changes in borrowing costs and to local supply constraints. OpenAgent research shows Melbourne’s recovery has been gradual, supported by tighter listings and relative affordability versus Sydney, while weakness in the unit market and stretched affordability mean gains are likely to be modest rather than rapid.

RBA cash rate forecast 2026

On 3 February 2026, the RBA raised the cash rate by 0.25 percentage points to 3.85 per cent, noting that inflationary pressures had resurged (CPI was around +3.8 per cent) and demand was running strong. Most analysts had anticipated a hike given the recent uptick in inflation, although some saw it as a cautious first step pending further data. Below are the major banks’ updated forecasts (based on their latest published views heading into 2026): 

• CBA: Forecasts no further hikes for 2026, holding at 3.85 per cent.
• Westpac: Forecasts no further hikes for 2026, holding at 3.85 per cent.
• NAB: Forecasts one more hike in May, taking the cash rate to 4.10 per cent.
• ANZ: Forecasts no further hikes for 2026, holding at 3.85 per cent.

What this means for the Melbourne market

Melbourne often follows Sydney’s lead but usually with a milder swing. Higher rates will cool demand in Melbourne as well, especially since affordability is stretched. Melbourne’s recovery has lagged behind Sydney, so this hike is unlikely to spark a big rebound. Instead, conditions are likely to stabilise. We’d expect only tempered price growth (or even flat prices) rather than a surge. Given tight credit and slow population growth, any pickup in activity should be gradual. In past cycles, Melbourne has seen only small gains after a rate rise, so this move will probably keep Melbourne’s market relatively flat in the near term.

Melbourne house prices graphs and charts

Melbourne house price growth over the last 5 years has been a slow recovery after the 2021–22 boom and the subsequent correction. As of Feb 2026, Cotality data shows dwelling values were up by +0.1 per cent over the month, +0.1 per cent over the quarter, and +5.4 per cent over the year, leaving values about -0.7 per cent below the March 2022 record high.

The five-year chart shows Melbourne peaked in March 2022, then moved into an extended negative quarterly phase through 2022 before stabilising and slowly recovering across 2023–2025, with growth re-accelerating into 2025. As per Cotality’s analysis, this recovery has been more gradual than in some mid-sized capitals, reflecting Melbourne’s greater sensitivity to affordability constraints and a slightly higher flow of new listings that has eased some upward pressure on prices.

Melbourne property 30 year property price graph

This recent “slow grind” back toward prior highs sits alongside Melbourne property prices growth over the last 10 years, where strong long-run gains were driven by falling interest rates, population growth and constrained supply that together pushed the median much higher; OpenAgent’s historical review shows Melbourne’s median house price rising to roughly $1.1 million by 2025, reflecting that decade-plus of solid appreciation. 

Over the past 30 years, Melbourne has repeatedly moved through booms and corrections, and today, homeowners are more cautious while still supported by tight rental markets and ongoing population inflows; supply shortfalls and construction constraints mean demand pressures remain, even as higher borrowing costs temper how fast prices can climb.

Melbourne selling statistics

Melbourne’s selling indicators show a market where turnover has picked up, but selling times remain a touch longer than some other capitals, signalling steady buyer interest but a slightly slower pace of contract completion. The following data gives the detail behind that picture for the period around Feb 2026 using the latest monthly and quarterly figures available from the chart pack and recent auction results. .

Melbourne sales volume and days on market

Monthly sales activity in Melbourne was notably stronger than the national average, with Melbourne’s sales volume up 9.6 per cent on the year, while national sales rose 4.1 per cent in the same monthly measure. On a quarterly basis to January 202,6 the median time a Melbourne home spent on the market was 32 days, compared with a shorter combined capitals median over the same quarter.

^{Source: Cotality}

Melbourne’s stronger year‑on‑year sales performance, alongside a longer median selling time, suggests more stock is changing hands but not necessarily faster than other capitals. Put simply, there’s demand — buyers are active — but properties in Melbourne are taking slightly longer to reach sale, relative to the combined capitals median, which can reflect a wider range of stock or buyers taking more time to decide.

Melbourne new and total listings

New listings in Melbourne were higher than a year earlier, with a monthly increase of 4.5 per cent, while total advertised listings in the city were down 13.3 per cent on the previous year. Nationally, total listings remain well below last year’s level, which is a key factor supporting prices across most markets.

^{Source: Cotality}

The mix of more fresh listings but a much lower total advertised stock means sellers are still cautious about bringing homes to market, keeping overall supply tight even though more homes are appearing each month than a year ago. For buyers, this typically means more choice in the short term from newly listed homes, but continued competition for the limited pool of all advertised properties.

Melbourne vendor discount and auction clearance rates

Vendor discount is the percentage difference between the original asking price and the final sale price, showing how much price is negotiated off the initial offer. Auction clearance rates measure the share of scheduled auctions that sell under the hammer or shortly afterwards. Together, they give a picture of sellers’ pricing strength and how keen buyers are to win properties at auction.

Melbourne vendor discount

^{Source: Cotality}

Vendor discounts in Melbourne have been around the low single digits in recent months, generally clustering near -3.0 per cent to -3.2 per cent in the data series, which signals that sellers are not routinely conceding large discounts. That range is broadly in line with the combined capitals and points to balanced—but not weak—selling conditions for vendors.

Melbourne auction clearance rates

^{Source: Domain}

Auction results over the most recent reported weeks show clearance rates in Melbourne moving from about 70 per cent in the week ending 25 January to the low‑60s in the first two weeks of February (70 per cent, 63 per cent and 64 per cent for the weeks ending 25 January, 1 February and 8 February respectively). Auction volumes also rose into the second week of February, indicating that while a slightly smaller share of auctions cleared compared with late January, buyer activity at auction remained meaningful.

Melbourne property investing

Melbourne’s rental market is showing signs of renewed tightness after a short seasonal pause over summer. Below, we break down the latest rental rates, yields and vacancy trends so you can see what’s pushing rents and availability in Melbourne right now.

Melbourne rental market

This section looks at rental rates and gross yields, and how they have changed over the year for houses and units. The table below summarises the headline rental metrics for the nation and each capital from the latest Cotality monthly chart pack data available for the start of 2026.

^{Source: Cotality}

Melbourne’s rent growth has been noticeably weaker than most other capitals, and gross yields are relatively low compared with regional markets because dwelling values have risen faster than rents. Cotality’s data shows Melbourne’s annual rental growth has been modest compared with other capitals, and that lower yields are partly the result of stronger value growth at the top end of the market and limited new supply coming to market.  

Melbourne vacancy rates

Vacancy rates show how easy it is for renters to find accommodation and how much bargaining power tenants have. Nationally, vacancies tightened early in 2026, with advertised vacancies continuing to run very low in most capitals, which supports upward pressure on rents into the first half of 2026.

^{Source: SQM Research}

What stands out for Melbourne is the quick month‑to‑month change: vacancies fell back in the new year after a small seasonal rise, showing the market can tighten rapidly once demand returns. Melbourne’s vacancy rate in the latest SQM release was below earlier summer levels but still looser than some capitals, and that combination has kept rent rises more muted here than in tighter markets.  

Sam Tate, Head of Property at SQM Research said in his latest SQM rental market report

“The decline in the national vacancy rate to 1.2% in January highlights how quickly seasonal increases in rental supply can be absorbed in Australia’s current market. Most capital cities recorded tightening conditions, particularly Brisbane, Perth and Darwin, where vacancy rates are again sitting below 1%. With advertised rents rising in many markets early in the year, it suggests tenant demand remains strong. Unless we see a meaningful increase in new rental supply, upward pressure on rents is likely to persist through the first half of 2026.” 

Melbourne also fits the “seasonal lift absorbed” narrative, with vacancy falling from 2.0% in December 2025 to 1.7% in January 2026 and vacancies dropping from 10,667 to 9,197. It’s still running less tight than most capitals, but January’s tightening shows the market can re-tighten quickly when demand returns post-holidays. 

Combined asking rents are $672.95 per week and up 5.2% over the year, which aligns with Sam’s point that rent pressure is building again despite higher vacancy than other cities. With a 2.2% rolling monthly lift, Melbourne’s recent stability looks more like a plateau than a clear easing trend.

Highest growth areas in Melbourne

^{Source: Cotality}

Highlights for Melbourne’s high growth areas

• Frankston ranked #1 in January 2026 with a median value of $856,746 and annual growth of 14.3 per cent, and it has held a top‑ranking position in Melbourne’s highest growth list across the past six months, signalling sustained buyer interest in the south‑east. Suburbs to watch in Frankston: Seaford, Frankston, Frankston South, Frankston North, Carrum Downs, Langwarrin, Skye 
• Brimbank and Sunbury trade at almost identical median levels in January 2026 — $730,805 and $730,922 respectively — yet Brimbank is recording stronger annual growth at 10.0 per cent versus Sunbury’s 8.5 per cent, highlighting affordability‑led demand across inner‑west and outer‑north markets. Suburbs to watch in Brimbank and Sunbury: Deer Park, Taylors Lakes, Keilor Downs, St Albans, Sydenham, Diggers Rest, Sunbury 
• Kingston ($1,085,527, 8.8 per cent) and Whitehorse - East ($1,239,067, 8.6 per cent) show that higher‑value, middle‑ring areas are posting solid growth in January 2026, with both recording annual rises close to 9 per cent while sitting above the city’s median tiers. Suburbs to watch in Kingston and Whitehorse - East: Cheltenham, Nunawading, Mitcham, Vermont South 
• Dandenong (median $794,550, 8.5 per cent) and Tullamarine - Broadmeadows (median $740,035, 8.4 per cent) each recorded strong annual growth rates in January 2026 terms for established workforce and transport hubs, pointing to strong demand where jobs and infrastructure upgrades support buyer competition. Suburbs to watch in Dandenong and Tullamarine - Broadmeadows: Noble Park, Dandenong North, Dandenong, Springvale, Craigieburn, Mickleham, Kalkallo 
• Whittlesea - Wallan ($781,708, 7.7 per cent) and Knox ($965,300, 7.6 per cent) both sit near the lower end of the January 2026 growth range but remain in the top 10, reflecting ongoing interest in growth‑corridor family markets and steady demand in established outer‑east suburbs. Suburbs to watch in Whittlesea - Wallan and Knox: Epping, Lalor, Mill Park, Wollert, Beveridge, Mernda, Wallan, The Basin, Bayswater, Ferntree Gully, Rowville