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

Melbourne’s housing market has shifted into a softer phase after a modest recovery, with dwelling values down 0.2% in March and 0.6% over the March quarter. Even so, values remain 3.4% higher than a year earlier, the median dwelling value sits at $828,249, and total returns are running at 6.9%, which shows the market is cooling rather than collapsing.

What stands out is the contrast between short term momentum and the longer trend. Melbourne values have eased 0.9% since late November 2025 and remain 1.3% below their March 2022 peak, but they are still 8.5% higher than five years ago. In other words, the city is working through a clear loss of pace, yet it is doing so from a much higher base than pre upswing levels.

Key Takeaways

• Melbourne dwelling values fell 0.2% in March and 0.6% over the quarter, pointing to a market that is now losing momentum.
• Despite the recent dip, values are still 3.4% higher year on year, with the median dwelling value at $828,249.
• Melbourne has now slipped 1.3% below its March 2022 peak, and values have retreated 0.9% since late November 2025.
• Houses are holding up better than units annually, with house values up 4.0% over the year versus 2.0% for units.
• Units are showing firmer short term resilience, rising 0.3% in March and 0.1% over the quarter while house values fell.
• Gross rental yields remain relatively stronger in units at 4.9% compared with 3.2% for houses, helping support investor interest.
• Growth is highly uneven across Melbourne, with outer and more affordable submarkets such as Frankston, Keilor and Sunbury leading annual gains.

See how Melbourne’s property values have performed across houses and units over various timeframes, along with returns, yields, and median prices.

Watch Cotality’s March 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

After a period of stabilisation, Melbourne’s price growth has turned negative again in the short term. Dwelling values fell 0.2% over the month and 0.6% across the March quarter, making Melbourne one of the weakest performing capital city markets over that period. On a rolling annual basis, however, the market is still up 3.4%, which suggests the downturn is shallow so far rather than severe.

The longer arc shows just how restrained Melbourne’s recovery has been compared with other capitals. Values remain 1.3% below their previous peak from March 2022, and the five year growth rate is 8.5%, far below the stronger cumulative gains seen in markets such as Brisbane, Adelaide and Perth. That relative underperformance is important because it means Melbourne entered 2026 without the same price momentum cushion that stronger growth markets had built up.

There is also a notable split between houses and units. Melbourne house values fell 0.4% in March and 0.9% over the quarter, although they are still 4.0% higher than a year ago, with a median value of $982,876. Units performed better in the short term, rising 0.3% in March and 0.1% over the quarter, but their annual growth is softer at 2.0%, with a median value of $644,074. This points to a market where affordability is helping support attached housing even as detached housing loses pace.

Melbourne Property Market Trends

Buyer conditions in Melbourne are becoming more balanced. The recent softening has coincided with weaker auction clearance rates and a lift in advertised supply, giving buyers more choice and reducing the urgency that tends to drive sharper price gains. That shift matters because Melbourne is one of the cities where rising stock levels are most visible, which usually translates into longer decision times, more negotiation, and less upward pressure on values.

Affordability is clearly shaping demand patterns within the city. Lower priced segments are generally proving more resilient than premium stock, reflecting borrowing constraints and stretched serviceability. That is consistent with the stronger short term performance of units versus houses and also helps explain why Melbourne’s better performing pockets are concentrated in more affordable outer and middle ring locations rather than prestige markets.

Submarket performance reinforces that point. Among Greater Melbourne SA3 regions, Frankston led annual dwelling value growth at 11.3%, followed by Keilor at 9.5%, Sunbury at 9.0%, Brimbank West at 8.6% and Tullamarine to Broadmeadows at 7.5%. Casey South, Cardinia, Dandenong and Whittlesea to Wallan also posted solid gains, showing that demand remains active where price points are more accessible and where households can still make the numbers work.

Investor settings also remain relevant. Gross yields across Melbourne dwellings are 3.7%, with houses at 3.2% and units at 4.9%, so unit stock continues to offer the stronger income profile. Rental growth is still positive too, with Melbourne house rents up 4.0% annually and unit rents up 4.9%, which provides some support for investor demand even as capital growth slows.

The table outlines CoreLogic’s Home Value Index as of 1st April 2026, providing a snapshot of housing value performance across key indicators.

How to read these figures:

Melbourne (-1.3% from peak; peak in Mar-22) shows the market remains modestly below its record high after peaking in March 2022; +8.5% over the past five years points to moderate longer-term growth; and -0.6% over the March quarter 2026 indicates a slight easing in values.

Melbourne Property Market Forecast

Looking ahead, Melbourne appears set for a subdued and uneven year rather than a sharp rebound. The main headwinds are already in place: affordability is stretched, borrowing capacity is constrained by high mortgage assessment rates, consumer sentiment has weakened, and cost of living pressures are squeezing household budgets. In that environment, higher priced discretionary purchases are usually the first to slow, which leaves Melbourne particularly exposed given its softer recent momentum.

The more likely scenario is that values remain under pressure in the near term, especially if listings continue to rise and buyers keep taking a cautious approach. That does not necessarily imply a major correction, because supply is still relatively tight in aggregate and the labour market remains a key stabiliser. Instead, the most probable outcome is a market with patchy results: better resilience in affordable segments and units, weaker conditions in premium housing, and limited scope for broad based price growth across 2026.

A lot will depend on three variables from here. First, whether inflation and interest rate expectations improve enough to lift confidence. Second, whether the increase in listings becomes large enough to materially shift bargaining power further toward buyers. Third, whether affordability pressures keep funnelling demand into lower priced corridors, which could allow selected Melbourne submarkets to outperform even while the citywide headline numbers stay soft.

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 is no longer in a strong growth phase. The market is softer, values have edged lower for several months, and the balance has tilted back toward buyers as supply lifts and urgency fades. Still, the current downturn remains mild by historical standards, with annual growth still positive at 3.4% and the median dwelling value holding above $828,000.

The key takeaway is that Melbourne has become a market of divergence. Affordable areas and units are showing better resilience, while broader citywide growth has lost momentum and premium segments face more pressure. For now, that points to a cautious outlook, modest downside risk, and a year in which select pockets may still perform well even if the overall market stays subdued.

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