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

Melbourne’s property market is showing signs of a modest recovery after a prolonged downturn. While home values have increased over the past two months, they remain 5.6% below their March 2022 peak. In March alone, values rose 0.5%, following a 0.4% increase in February, signaling an early but cautious turnaround in buyer sentiment.

Melbourne Property Price Growth

Over the past quarter, dwelling values in Melbourne grew 0.3%, yet annual growth is still in negative territory (-2.6%). Houses saw a slightly better quarterly performance (0.6%) compared to units (-0.2%). The median dwelling value stands at $781,318, with houses at $929,070 and units at $608,614. Despite this mild uptick, Melbourne continues to trail other capitals in annual performance.

CoreLogic Home Value Index

CoreLogic Home Value Index, Released on 1st April 2025

Melbourne Property Market Trends

The improvement in sentiment post-February’s rate cut has contributed to Melbourne’s slight rebound. As with Sydney, Melbourne’s upper quartile housing stock is beginning to respond more strongly to easing monetary policy. However, affordability challenges remain significant, with mortgage repayments for median-value homes still absorbing over 50% of gross household income.

Change in dwelling values over key time periods

Melbourne Property Market Forecast

Looking ahead, any material upswing in Melbourne’s housing market is expected to be gradual. With monetary policy still above neutral, affordability stretched, and housing supply constrained, steady, low-level growth is more likely than a sharp rise. That said, improved consumer sentiment, easing living costs, and stable labor markets should support ongoing moderate gains.

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.

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Conclusion for Homeowners

Melbourne’s market is gently recovering, though still lagging behind its previous highs and national peers. A sustained recovery will depend on how broader economic conditions evolve—particularly interest rates, wage growth, and housing supply. For now, the city’s property market appears to be stabilizing, with cautious optimism ahead.

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