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Home › Property Market Update › Melbourne, VIC
Melbourne continues to navigate a measured property recovery phase, marked by gentle price movements and steady buyer interest. The city’s housing market has shown modest but consistent growth, helped by improving consumer sentiment, a more stable interest rate outlook, and constrained supply. With a current median dwelling value of $840,404, Melbourne remains one of the more affordable capital cities relative to Sydney, yet still one of the most valuable markets nationwide.
See how Melbourne’s property values have performed across houses and units over various timeframes, along with returns, yields, and median prices.
Watch CoreLogic’s monthly Housing Market Update for expert commentary on national and capital city housing trends, price movements, and key market drivers across Melbourne.
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Melbourne’s housing market continues to exhibit restrained momentum. Over the 12 months to July 2025, dwelling values in Melbourne grew by just 0.4%, making it one of the weakest-performing capital cities. House values edged up a modest 0.6%, while unit values barely moved at +0.1%. In fact, the city recorded a -0.3% decline over the last quarter, and July itself posted a -0.1% drop, underscoring the fragile conditions.
While many other cities experienced stronger gains, Melbourne remains subdued due to relatively high stock levels and sluggish buyer activity. Importantly, Melbourne has the highest volume of listings among the capitals, giving buyers the upper hand in negotiations and limiting upward pressure on prices.
View the latest property value movements across Australia’s capital cities. Use the filters to explore monthly, quarterly, and annual changes by dwelling type and region. Data sourced from CoreLogic.
CoreLogic Home Value Index, Released on 1st August 2025
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Melbourne is seeing distinct signs of a soft buyer’s market. The city’s total listings remain well above the five-year average, with vendor discounting and days on market metrics deteriorating. Homes are taking longer to sell, and sellers are having to accept larger discounts compared to other major markets like Sydney or Brisbane.
This oversupply is partly due to weaker population growth and affordability constraints in the post-COVID era. Many prospective buyers have become more price-sensitive, opting to hold off amid elevated interest rates and cost-of-living pressures. Meanwhile, rental markets in Melbourne have tightened, with rents rising steadily—especially in the unit sector—but this has not yet translated into strong investor-driven buying activity.
Dwelling value growth over the past 5 and 10 years, including combined capital and regional market performance.
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Cotality’s outlook for Melbourne aligns with its broader national forecast: modest price increases are expected through the remainder of 2025, underpinned by improved affordability due to anticipated rate cuts and a more favourable inflation environment. With the RBA’s inflation target now within range, interest rates are likely to soften—offering relief to buyers and potentially unlocking greater demand.
However, Melbourne’s performance is expected to remain tempered compared to higher-growth capitals like Perth or Brisbane, given its larger exposure to the unit sector and past oversupply issues.
The Reserve Bank of Australia’s ongoing adjustments to interest rates will likely play a crucial role in shaping market dynamics, as higher borrowing costs limit purchasing power for many buyers.
Here are some of the most recent forecasts by the big-4 banks in Australia:
Oxford Economics recently released property forecasts predicting where house prices will be in three years.
Melbourne’s property market is staging a cautious recovery. Dwelling values are rising gradually, with select submarkets showing stronger momentum. Rent growth remains limited, and yields are moderate. As economic conditions ease, particularly around interest rates, Melbourne is likely to continue on a path of slow and steady recovery rather than dramatic gains. The fundamentals are stable, but the pace of growth will likely remain conservative relative to other major cities in the near term.
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