Weakness in Melbourne provides rare opportunity - John McGrath

Australia has a two-speed property market at the moment, with some capital cities and regions recording fast home price growth and others seeing only sluggish growth, or even falls.

Melbourne is one of the markets that has shifted into low gear, as changes to land tax and better housing supply than other capitals have kept prices relatively flat.

As discussed in the McGrath Report 2025, Melbourne’s median dwelling prices saw a modest uptick of 1.3% in FY24, according to CoreLogic data. This made Melbourne the second-weakest capital city market next to Hobart. Home prices in regional Victoria declined by 0.5% over the same period.

A key reason for this weakness is higher housing supply. Over the past decade, 733,000 new homes have been delivered in Victoria, which is the best result in Australia and significantly more than NSW’s 650,000 completions over the same period.