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

Melbourne’s housing market has shifted into a flatter phase, with values holding steady month-to-month but easing over the past quarter. After a period where Sydney and Melbourne often set the pace nationally, momentum has rotated toward the mid-sized capitals, while Melbourne has become more sensitive to weaker sentiment and tighter affordability conditions.

Even so, the market remains supported by constrained supply overall, alongside steady underlying demand in more affordable segments. A notable feature recently has been a pickup in vendor activity, suggesting sellers are becoming more motivated as conditions stabilise and the market becomes more price-discerning.

Market Highlights

• Melbourne dwelling values were flat over the past month but fell -0.4% over the quarter, pointing to softer near-term momentum.
• Over the past year, Melbourne dwelling values rose 4.7%, with a median value of $826,132.
• Melbourne remains about 1% below its prior peak (reached in March 2022), showing it has not fully regained earlier highs.
• New listings in Melbourne have lifted to around 12% above the five-year average, signalling rising vendor participation.
• Total advertised stock is still modestly tight (roughly 4% below the five-year average), keeping a floor under prices in many areas.
• Value growth is increasingly segmented, with stronger competition at the more affordable end and softer outcomes at higher price points.

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 December 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’s price growth is positive over the year but has cooled materially in the short term. Monthly values were flat, while the rolling quarterly result moved lower, indicating demand has become more cautious as borrowing conditions and confidence weigh on buyer activity.

Over a longer lens, Melbourne’s growth has been modest compared with several other capitals. The city has seen 4.7% annual growth in dwelling values, and while the five-year result remains positive, the market has underperformed the strongest growth cycles seen elsewhere.

Melbourne is also still slightly below its previous peak (around 1% down from the high reached in early 2022). That near-peak position matters because it reinforces how sensitive the market can be to shifts in interest rates, serviceability settings, and household sentiment.

Melbourne Property Market Trends

The clearest trend is growing divergence within the market. Affordability pressures are deflecting demand toward lower-priced homes and away from premium segments, where serviceability constraints are tighter and buyers are less willing to stretch.

Supply conditions remain an important stabiliser. While advertised stock is still relatively low by historical standards, Melbourne has seen a noticeable lift in newly listed properties recently, implying more vendors are testing the market and potentially trying to sell ahead of any further easing in buyer demand.

At the same time, broader settings are shaping behaviour. Higher borrowing costs, serviceability buffers, and more restrictive lending at the margin all encourage more selective purchasing decisions, longer decision cycles, and greater sensitivity to price, condition, and location.

The table outlines CoreLogic’s Home Value Index as of 28th February 2026, showing peak declines, five-year growth, and changes since the first rate cut in February.

Melbourne Property Market Forecast

Melbourne’s outlook is best described as modest growth with uneven outcomes. The market is likely to remain segmented, with the more affordable end holding up better due to deeper buyer competition, while higher-priced segments may face softer demand because access to credit is more constrained.

A key swing factor will be listings. If the current rise in new listings continues, it could reduce some of the tightness that has supported prices, especially in areas where buyer demand has cooled. However, overall stock levels remain low enough that any downside is more likely to be contained rather than sharp, assuming labour market conditions stay supportive.

On balance, Melbourne appears set for a slower, more selective market through 2026, where price growth relies less on broad-based momentum and more on affordability, scarce stock in specific pockets, and buyer capacity under lending rules.

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 has entered a flatter stage of the cycle: stable month-to-month results, softer quarterly movement, and moderate annual growth. With a median dwelling value of $826,132, affordability and borrowing capacity are central to how demand is being distributed across the city.

The market’s direction from here is likely to be shaped by two competing forces: constrained supply that limits downside risk, and demand headwinds that reduce the ceiling for rapid price gains. This combination points to a year where outcomes depend heavily on price point and suburb-level dynamics rather than a uniform citywide uplift.

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