Melbourne Property Market – Prices, Trends, Forecast [December 2024]

Melbourne’s housing market continues to face downward pressure, with values falling by -0.4% in November. Over the past year, values have declined by -2.3%, reflecting weaker conditions compared to other major cities.

Melbourne Property Price Growth

The median dwelling value in Melbourne is now $776,949, marking one of the lowest annual performances among Australian capitals. The city has recorded declines in 10 of the past 12 months, indicating a prolonged cooling phase.

CoreLogic Home Value Index

CoreLogic Home Value Index, Released on December 1, 2024

Melbourne Property Market Trends

Melbourne’s market is characterized by rising stock levels, with advertised listings now 9.1% above the five-year average. At the same time, purchasing activity is slowing, with sales volumes estimated to be -4.6% lower than a year ago. This rebalancing of supply and demand has contributed to weaker selling conditions.

Summary of housing values since the onset of COVID in March 2020 and relative to peak levels (onset of COVID calculated from March 2020).

Melbourne Property Market Forecast

Looking ahead, Melbourne’s market is expected to remain subdued as affordability challenges and higher interest rates persist. With potential rate cuts delayed into mid-2025, demand may remain weak, keeping downward pressure on prices in the short term.

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 homeowners face a challenging market with declining values and rising competition. While the long-term outlook may improve with economic adjustments, current conditions suggest a cautious approach for those considering selling.

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