Melbourne Property Market – Prices, Trends, Forecast [January 2026]

Melbourne’s housing market lost a little momentum at the end of 2025, with values edging down slightly over the month while still holding onto moderate growth across the year. Melbourne dwelling values rose 4.8% over 2025, and the city’s median dwelling value sits at $827,117.

Market Highlights

• Melbourne dwelling values eased 0.1% in December, but still finished 2025 4.8% higher, taking the median dwelling value to $827,117.
• Momentum has cooled, with quarterly growth at 0.8%, and Melbourne remains 0.9% below its March 2022 peak despite a 15.5% lift over the past five years.
• Rents have been comparatively subdued, rising 2.9% over 2025, while gross rental yields sit around 3.6%, reflecting values outpacing rental growth.
• Within Greater Melbourne, growth has been uneven, led by Frankston (+14.3%), Brimbank (+9.5%) and Kingston (+9.4%) over the past year.

Housing Metrics Overview

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 January 2026 Housing Market Update for expert commentary on national and capital city housing trends, price movements, and key market drivers across Melbourne.

Melbourne Property Price Growth

December saw a small monthly decline of 0.1% in Melbourne dwelling values, matching Sydney as the weakest result among the capitals for the month. Quarterly growth remained positive at 0.8%, pointing to a market that softened late in the year rather than reversed outright.

Over a longer lens, Melbourne remains slightly below its prior peak, with values still down 0.9% from the high reached in March 2022. Even so, the city has posted solid gains over the past five years, up 15.5% across that period.

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.

Melbourne Property Market Trends

The premium end of the market has been a drag on growth, with affordability and borrowing constraints steering demand toward lower-to-mid priced stock. That pattern has been evident across major cities and helps explain Melbourne’s milder annual rise compared with stronger-performing capitals.

Within Greater Melbourne, performance has been uneven. Some SA3 areas have recorded notably stronger annual gains than the citywide average, led by Frankston at 14.3%, followed by Brimbank at 9.5% and Kingston at 9.4%.

Rental conditions in Melbourne have also been comparatively subdued. Dwelling rents rose 2.9% over 2025, the smallest increase among the major regions reported, while gross rental yields for Melbourne dwellings sit around 3.6%, reflecting the broader trend of values rising faster than rents.

The table outlines CoreLogic’s Home Value Index as of 2nd January 2026, showing peak declines, five-year growth, and changes since the first rate cut in February.

Melbourne Property Market Forecast

The near-term outlook points to softer, more uneven conditions. Confidence has been sensitive to shifting expectations around inflation and interest rates, with “higher for longer” settings likely to keep a lid on buyer capacity. Affordability constraints should remain a key limiter, particularly for higher-priced segments.

At the same time, tight supply conditions are expected to provide support, reducing the likelihood of a broad-based correction and helping to keep downside limited even if demand cools further.

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:

• ANZ predicts a 5-6% increase in capital city property prices in 2024, with Brisbane expected to see the highest rise at 9-10%, Perth property values could go up by 1-11%, Sydney by 4-5%, and Melbourne prices by 2-3%.
• CBA forecasts a 5% rise in capital city prices, with some variations: Brisbane is anticipated to grow by 6%, Melbourne and Perth by 5%, Sydney by 4%, and Adelaide by 1%.
• NAB projects a 5.4% average increase across the capitals, with Brisbane expected to see a 6.5% rise, Perth and Adelaide by 6.2%, Melbourne by 5.5%, Sydney by 5%, and Hobart remaining flat.
• Westpac expects a 6% growth across the combined capitals, with Perth leading at 10%, followed by Brisbane at 8%, Sydney at 6%, Adelaide at 4%, and Melbourne at 3%

Oxford Economics recently released property forecasts predicting where house prices will be in three years.

Conclusion

Melbourne finished 2025 with modest annual growth but a clear late-year slowdown. Price performance has been held back by affordability pressures and softer conditions at the top end, while select outer and middle-ring areas have outperformed. The market looks set for a more restrained 2026, shaped by interest rate uncertainty and stretched budgets, with low supply acting as the main stabiliser.

Make Smarter Property Decisions Today