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Melbourne property market data, trends, forecasts

Melbourne property market news

After a historic boom in 2021 which saw median Melbourne property prices surge by more than +17 per cent, 2022 ended up being a turbulent year for the Melbourne property market. Home values fell -9.6 per cent from the February 2022 peak according to CoreLogic data, but momentum shifted significantly in 2023. Leading into 2024, however, things took another turn and Melbourne property prices have declined slightly in the new year.

Melbourne property prices - April 2024

Property typeMonth change (Apr 24)Quarter change (Apr 24)Annual change (Apr 24)Current median price (Apr 24)
All Melbourne dwellings-0.1%0.0%2.8%$783,261

The 2023 turnaround was driven by a prolonged shortage of listings which have remained low since the muted 2022 spring selling season. Sellers displayed hesitancy in the rising interest rate environment, and that shortage helped to stimulate price growth once again. A combination of rising listings and high interest rates have put the brakes on growth, though. 

Looking to 2024, new listings in April were up +32.4 per cent on the same month in 2023, so sellers have been returning to the market in a big way. Total listings were up a smaller +10.6 per cent higher, suggesting buyers are still absorbing the new stock to some degree. Melbourne's median days on market (DOM) was 36 in April 2024, a leap up from 29 days recorded the previous year. Sales volumes are up +8.3 per cent year on year.

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    Melbourne house prices

    The house-led boom of 2021 saw Melbourne house prices shoot up to record highs before hitting their peak in February 2022 and then falling over the following 12 months. Solid growth was returning since that point until a slowdown in the latter stages of 2023 and early into 2024.

    Melbourne house prices - April 2024

    Property typeMonth change (Apr 24)Quarter change (Apr 24)Annual change (Apr 24)Current median price (Apr 24)
    Melbourne houses-0.2%-0.3%3.0%$941,698

    Melbourne's median house price held close to flat in March, falling -0.2 per cent to sit at just over $940,000. Quarterly movement is also slightly in the negative, while annual growth remains in the positive range at +3.0 per cent. We will now wait to see whether any price growth can continue in the face of rising listings over the first half of 2024.

    Top 5 Melbourne suburbs for first home buyers - houses

    While Melbourne remains more affordable than Sydney, finding reasonably priced housing to suit first home buyers can be tricky. Here are a few of our top selections for Melbourne suburbs where you can still pick up a house below the city's median price. 

    Top Melbourne suburbs under $950,000 house price

    SuburbMedian house price
    Braybrook, 3019$760,000
    Laverton, 3028$572,500
    Bellfield, 3081$930,000
    Meadow Heights, 3048$570,000
    Doveton, 3177$560,000

    Melbourne unit prices

    While house prices surged in 2021, Melbourne's median unit price increased at a softer rate as buyers followed a 'race for space' mentality and looked for larger homes or regional escapes. The positive is that Melbourne unit owners since experienced smaller drops in value as the downturn unfolded, and unit prices held strong throughout most of 2023. There has been an upward shift in April 2024, though. 

    Melbourne unit prices - April 2024

    Property typeMonth change (Apr 24)Quarter change (Apr 24)Annual change (Apr 24)Current median price (Apr 24)
    Melbourne units0.1%0.4%2.5%$613,023

    The median unit price in Melbourne grew by +0.1 per cent in April to sit just over $613,000. Over the past three months, prices are up by +0.4 per cent, while annual change sits in positive growth at +2.5 per cent.

    An increase in demand for units due to upcoming immigration and renewed interest from first home buyers looking for a cheaper alternative could continue to support unit prices in 2024. 

    Top 5 Melbourne suburbs for first home buyers - units

    Units offer better affordability for first home buyers in Melbourne, although median prices are still substantial. Here are some of our top picks for Melbourne suburbs where you can buy below the median unit price. 

    Top Melbourne suburbs under $600,000 unit price

    SuburbMedian unit price
    West Footscray, 3012$560,000
    Kensington, 3031$535,000
    St Kilda West, 3182$495,000
    Craigieburn, 3064$427,000
    Kingsbury, 3083$445,500

    Melbourne property market forecast 2024-25

    2023 was a year of two halves. Prices surged in the first six months of the year before easing off later on and drifting into 2024 with negligible growth. So what are the big banks saying about what to expect in the year ahead?

    NAB's latest Melbourne house price forecast has eased, projecting Victorian capital dwellings gaining +2.6 per cent in 2024 with a further +3.7 per cent to come in 2025. 

    Westpac's Melbourne real estate forecast sits in a similar range, with prices now expected to rise by +3.0 per cent in 2024 and +2.0 per cent in 2025.

    Big four banks' Melbourne home price forecasts 2024-25

    BankMelbourne property prices 2024Melbourne property prices 2025
    Westpac3.0%2.0%
    NAB2.6%3.7%
    ANZ2-3%4.0%
    CBA5.0%N/A

    Whether or not this growth can be achieved still largely depends on the supply and demand dynamic over the rest of the year. Interest rates had extensive impacts on the market and, while there is now a period of stability, the high rate environment is still causing stress for buyers and homeowners alike. 

    Currently, the RBA sits at 4.35 per cent, a long way up from the emergency-level 0.1 per cent rate borrowers were enjoying until May 2022. The banks mostly expect there will be no further hikes, with rate cuts to begin in the later stages of 2024 or early in 2025.

    Big four banks' cash rate forecast 2024-25

    BankPeak rate forecastMonth of peak rateRate cut forecastMonth of trough
    Westpac4.35%November 20233.10%December 2025
    NAB4.35%November 20233.10%November 2025
    CBA4.35%November 20233.10%December 2025
    ANZ4.35%November 20233.60%June 2025

    Melbourne house prices outperformed units throughout the rebound, though that dynamic has been shifting. Units and more affordable houses could now be well-placed to deliver stronger gains throughout 2024.

    Units and entry-level houses are expected to appeal further to incoming investors and first home buyers as immigration has ramped up significantly, bringing additional demand to the rental market in particular.

    What are industry experts saying?

    Michael Yardney - Director of Metropole Property Strategists

    "Clearly the Melbourne housing market has not performed as strongly as some other capitals over the last year. This creates a window of opportunity for strategic property investors as Melbourne property values have significant upside potential.

    The average price of a Melbourne standalone house is the lowest it has been against its Sydney equivalent in around twenty years. Partly it might reflect the greater stock of housing available for sale in the Melbourne market relative to other states.

    Also, investor demand has also been lower in Melbourne due to discontent with the way the Victorian government is treating investors and favouring tenants."

    Matthew Hassan - Senior Economist at Westpac

    "The circumstantial evidence and anecdotal evidence is pretty clear that what we’re seeing in terms of price weakness and underperformance since the middle of last year relates back to [state government property] tax changes.

    Following those changes, we saw a significant lift in listings for units, so it looks like investors sold off part of their holding in response.

    And the state economy is a little bit softer [in Victoria] but I think it’s primarily about the repositioning investors are going through. That’s really the point of difference over the last nine months or so."

    Melbourne house prices graphs and charts

    The latest chart pack from CoreLogic clearly demonstrates the rapid acceleration and subsequent deceleration of the Melbourne property market over the past two years. The worm turned once more in 2023 but has fallen back towards flatter levels moving into 2024.

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    Melbourne property prices have embarked on a healthy recovery in 2023 before winding back this year. Source: CoreLogic, April 2024

    The upturn during the 2021 boom was one of the most aggressive and significant periods of growth in Australian history. The downturn that's followed has also proved to be a historic one, though, but growth came back with strength in 2023. 

    Zooming out and looking at the wider context over the past 30 years, though, prices in Melbourne have seen incredibly strong increases. The below chart shows Melbourne house prices soaring well beyond every capital city save for Sydney, particularly since around 2013.

    Copy Block Image
    This Melbourne house prices graph over the last 30 years shows staggering ongoing growth. Source: CoreLogic, Domain

    When taken into the perspective of even the past few years, Melbourne homeowners have experienced huge gains to the value of their properties.

    Selling Melbourne property

    According to Domain's latest figures, auction clearance rates in Melbourne have been holding strong since the market recovery, regularly sitting at or above 65 per cent. Melbourne Days On Market (DOM) has pushed higher and is currently above the average national level.

    Melbourne auction clearance rate61%15th June, 2024

    Melbourne DOM36 days3 months to April 2024

    Melbourne new listings+32.4%3 months to April 2024

    Melbourne sales volumes+7.6%3 months to April 2024

    Melbourne property investment

    The Melbourne property market has been turbulent for investors throughout the pandemic, however prices have lowered, rental vacancies are still around record lows, and asking rents continue to surge with further demand expected due to increased immigration. Considering these factors, it could be a positive time for Melbourne property investors. Many are opting out of the market, though, as rising mortgage commitments create pressure.

    Melbourne house rents+10.2%12 months to April 2024

    Melbourne unit rents+8.8%12 months to April 2024

    Melbourne rental yields3.6%April 2024

    Melbourne vacancy rate1.1%April 2024

    Top 5 suburbs for Melbourne investors

    The latest BuyersBuyers Investor Special Report detailed some of the top suburbs where Melbourne investors could find strong future potential. 

    The report explains that "prior to the pandemic, Melbourne had become a global city, and its population growth was the strongest in Australia due to strong immigration. 

    "This trend is likely to resume in 2023, and Melbourne is expected to be the largest capital city of Australia over the coming decade."

    Top suburbs for investors to buy units in Melbourne

    SuburbRegionPostcodeProperty typeNo. of propertiesMedian price ($)
    KewNorth East3101Unit5,042$848,098
    Doncaster EastNorth East3109Unit4,199$856,240
    CarnegieSouth East3163Unit6,393$645,017
    Pascoe ValeNorth West3044Unit4,152$661,352
    SpringvaleInner East3171Unit3,212$560,074

    The report noted that "family-suitable apartments in small unit blocks in popular areas, where houses are out of reach, have also delivered solid capital growth and a healthy rental return," adding that "units have underperformed houses significantly in Melbourne over the past decade, and there are some opportunities for contrarian investors to pick up a bargain."

    Looking to invest in Melbourne property? 

    Melbourne property FAQs

    • Will the Melbourne property market crash?

      Considering there is significant uncertainty about inflation and interest rates, Melbourne property market forecasts are wide-ranging. Get the full picture and a more well-rounded understanding of what's to come in our article, will the Australian property market crash?

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    • Should I sell my Melbourne house now or wait?

      Selling your property is a huge decision that deserves all your careful consideration weighing up the advantages and disadvantages of either scenario. 

      Even if the market feels uncertain, it’s important to remember that it’s all relative and the market doesn’t stop. There will always be properties being listed and buyers out there wanting to purchase a home. 

      For a clearer picture of what the market is looking like and whether it's a good time to be listing your Melbourne property, check out our article: should I sell my house now or wait?

       

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    • Where are the top growth suburbs in Melbourne?

      According to recent CoreLogic data, at least ten Melbourne suburbs experienced growth of +14 per cent or higher in the six months to August 2022. The median house price in Elwood surged more than +19 per cent, units in South Morang jumped by over +17 per cent, and Rockbank houses increased in value by +16.8 per cent.

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