Melbourne Property Market – Prices, Trends, Forecast [December 2025]

Melbourne’s housing market continues to grow at a modest pace. Values rose 0.3% in November, contributing to a 1.6% increase over the quarter. Conditions are steadier than in the mid-sized capitals, reflecting more balanced supply levels and milder price pressures. The median dwelling value is $823,495.

Market Highlights

• Dwelling values rose 0.3% in November and 1.6% over the quarter, reflecting steady growth.
• Annual price growth reached 4.2%, with houses rising 5.0% and units increasing 2.2%.
• Momentum is strongest in the middle of the market, supported by comparatively better affordability.
• Auction clearance rates sit in the low 60% range, showing balanced but cautious buyer activity.
• Rental growth is mild relative to other capitals, and gross yields sit at 3.6%.
• Median dwelling value stands at $823,495.
• Growth is expected to remain moderate through 2026 as affordability and borrowing capacity shape buying behaviour.

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 November 2025 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

Annual growth reached 4.2%, placing Melbourne among the softer-growing capitals. Houses rose 5.0% over the year and units increased 2.2%. The middle of the market is recording the strongest momentum, unlike most other cities where growth is concentrated in the lower quartile. Total annual return sits at 7.8%.

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

Buyer activity remains consistent but not overheated. Auction clearance rates are holding in the low 60% range, signalling stable but cautious demand. Rental conditions are tightening, although at a slower pace than elsewhere. Melbourne posted one of the mildest annual rent increases across both houses and units. Gross rental yields are 3.6% for dwellings, slightly above the combined-capitals average but still restrained by value growth.

The city continues to benefit from comparatively better affordability than Sydney, which is supporting demand across mid-priced segments. Listings levels are closer to normal, helping temper upward price pressure.

The table outlines CoreLogic’s Home Value Index as of 1st December 2025, showing peak declines, five-year growth, and changes since the first rate cut in February.

Melbourne Property Market Forecast

Moderate growth is expected through 2026. Stable interest rates and ongoing cost-of-living pressures are likely to keep buyer demand measured. Government incentives may assist first-home buyers, but affordability constraints will continue to cap the pace of gains. Melbourne’s balanced supply and demand profile points to slow, steady growth rather than rapid acceleration.

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 remains a stable market with consistent but moderate price appreciation. Growth is centred in the middle of the market, rental conditions are firming gradually and affordability remains a relative strength. Values are expected to keep rising, although the pace is likely to remain modest as financial constraints shape buyer capacity.

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