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

Melbourne’s housing market has continued its gentle recovery through October 2025, reflecting renewed buyer activity after a sluggish 2024. Dwelling values rose 0.9% over the month, 1.6% over the quarter, and 3.3% annually, taking the city’s median value to $818,975. Though modest compared to Brisbane and Perth, Melbourne’s rebound is steady and broad-based, supported by returning confidence among both homebuyers and investors.

Market Highlights

• Dwelling values up 0.9% in October, 1.6% quarterly, and 3.3% annually, with a median of $818,975.
• Market recovering steadily after 2024’s slowdown, led by stronger activity since early 2025.
• Still 1.4% below its March 2022 peak, but showing 17.6% five-year growth and 4.2% since February 2025.
• Houses rose 4.0% annually, units up 1.5%; total returns reached 6.8%.
• Growth strongest in affordable areas: Frankston (11.7%), Brimbank (8.8%), Broadmeadows (8.0%).
• Lower and mid-market segments outperform as buyers shift toward affordability.
• Vacancy rates low, with yields around 3.6%; supply remains tight amid weak new construction.
• Building costs now 31% higher than five years ago, adding pressure on affordability.
• Outlook: moderate, sustainable growth expected as rate cuts end and inflation weighs on sentiment.
• Overall: Melbourne is in a measured recovery, driven by steady demand and limited supply.

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 October 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

Melbourne remains 1.4% below its March 2022 peak, yet it has posted 17.6% growth over the past five years and 4.2% since February 2025, when the national rate cuts began boosting market activity. House values climbed 4.0% annually, while unit values rose 1.5%, narrowing the performance gap between the two property types.
Total returns reached 6.8%, combining both value growth and rental income.

The city’s most dynamic local markets are in the middle and outer belts, particularly the more affordable zones. Frankston led Melbourne’s growth with an 11.7% annual rise, followed by Brimbank (8.8%), Tullamarine–Broadmeadows (8.0%), Knox (7.1%), and Dandenong (7.1%). These areas benefited from affordability, access to infrastructure, and ongoing demand from first-home buyers.

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

Melbourne’s housing recovery is uneven across price segments. The lower and mid-market brackets are outperforming the upper quartile as tighter serviceability limits, higher construction costs, and cost-of-living pressures push demand toward more attainable properties.

Rental conditions remain tight, with vacancy rates near record lows and gross yields around 3.6%, reflecting strong leasing demand but also rising property values that are capping returns.

In the broader context, demand is outpacing supply. Listing volumes remain below seasonal averages, and new housing completions continue to lag, with national construction costs up 31% in five years. Limited new builds and slower supply growth are key forces underpinning Melbourne’s gradual price recovery.

The table outlines CoreLogic’s Home Value Index as of 3rd November 2025, showing peak declines, five-year growth, and changes since the first rate cut in February.

Melbourne Property Market Forecast

The outlook for Melbourne is one of moderate but sustainable growth. Economists expect price momentum to ease slightly in late 2025 as affordability strains deepen and the Reserve Bank’s rate-cut cycle nears its end. Inflationary pressures and tighter investor lending standards may also slow the pace of expansion.

Still, Melbourne’s fundamentals—population growth, resilient employment, and low housing supply—suggest continued upward pressure on prices through 2026, albeit at a slower pace. Buyers in outer and middle-ring suburbs are likely to remain the key drivers of activity as affordability challenges limit movement in the premium segment.

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’s housing market has stabilized, showing steady recovery from its early-2020s downturn. Value gains are modest but widespread, with middle- and lower-priced suburbs leading the charge.

While affordability and economic headwinds will likely temper short-term growth, the underlying imbalance between demand and limited supply positions Melbourne for continued gradual appreciation into 2026.

In essence, Melbourne is experiencing a measured comeback, firm but not overheated, driven by affordability seekers rather than speculative surges.

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